Auto industry concerned at delay in new policy announcement

LAHORE: Local auto industry is perplexed why the new auto policy is being delayed despite that the last auto policy has expired on June 30.

“The unnecessary delay in the announcement of the new auto policy is hurting local auto manufacturers since there are a number of issues to be resolved through the new policy,” said auto industry sources.

“The auto industry is on halt due to lack of clarity and multiple automotive companies have stopped invoicing in full month of July due to lack of clarity on HEV/PHEV sales tax, the auto industry sources said, adding, “We don’t know whether the sales tax on HEV/PHEV is 25 percent or not as there are rumours in the market that government is working to reduce HEV/PHEV sales tax to 18 percent. This confusion has stopped the auto industry sales and OEMs are waiting to seek clarity before proceeding to invoice vehicles to customers as per new sales tax. We assume that government and New Energy Vehicle importers/assemblers are having back channel discussions on this issue.”

The sources added that this lack of interest by the policymakers regarding the announcement of the new auto policy is making the government lose taxes on every passing day as the sales of vehicles has stopped,” said auto expert.

It is pertinent to mention here that local auto industry has already suggested to the government some measures that need to be addressed or included in the new auto policy and they are pinning hope on the new policy with regards to the stability of the industry.

The industry has asked the government to promote localisation and safeguard local investment by restricting CBU Imports to streamline the Import Bill consumption and incentivise localisation initiatives.

“Our demand has always been a long term consistent Auto Policy 2026-30 with no amendments during the period,” said the sources.

Copyright Business Recorder, 2026