Stakeholders voice concerns over auto policy: Mandviwalla briefed about operational challenges, tariff structures
ISLAMABAD: The local auto industry stakeholders have expressed serious concerns over the government’s auto policy, saying that due to confusion, not a single plug-in-hybrid vehicle has been produced locally during the past three weeks.
Briefing the Senate Standing Committee on Industries and Production, which met here on Wednesday with Senator Saleem Mandviwalla in the chair, industry representatives said the government had reduced tariffs on imported vehicles while refusing to lower duties on raw materials, a move they said was seriously hurting the local industry.
Auto industry representatives highlighted operational challenges, including tariff structures, high duty burdens on raw materials, and cost disadvantages faced by domestic producers.
They said that recently slashed tariffs have resulted in a significant increase in imports of foreign vehicles, as last week some 2,000 vehicles arrived at the Karachi Port. Responding to the question raised by the auto manufacturers, the Ministry of Industries and Production officials said that all the recent imported vehicles were electric vehicles (EVs), as the government was encouraging and promoting the use of EVs.
Auto industry representatives said that as a result of the new auto policy, the production of hybrid vehicles in the country has come to a standstill. They said that for the past 22 days, not a single hybrid or plug-in hybrid vehicle has been manufactured across Pakistan. Vehicles are not being produced because we do not have a defined tariff structure. They warned that if this situation continues for the next seven days, they will not have the funds to pay salaries.
Special Assistant Haroon Akhtar stated that to deal with the issue, the ministry has called a meeting of the Tariff Policy Board, adding that once the auto policy is finalized, the auto industry’s problem will be resolved. The committee subsequently called a joint meeting of the Ministry of Commerce and the Ministry of Industries and Production for the next session.
Briefing the committee, representatives of the Auto Parts Manufacturers Association said that duties on vehicles were reduced in the budget, but duties on raw materials were not reduced. Cumulatively, the auto industry employs 1.8 million people in the country, and the auto parts manufacturers generate eight times more jobs compared to basic manufacturing. They added that due to security concerns and Free Trade Agreements (FTAs), they are also unable to export.
Auto production in Pakistan was significantly more expensive compared to other countries. In 2003,Pakistan was manufacturing 200,000 vehicles annually while Indonesia was producing 300,000. Today, Indonesia produces 1.3 million vehicles, whereas Pakistan remains at the same 200,000 vehicles. Our automotive market stands where it was 20 years ago, primarily because the local industry was never supported.
The committee addressed governance concerns regarding the Export Processing Zones Authority, inquiring into the prolonged absence of a permanent chairman. In response to procedural delays, the committee agreed to submit recommendations to the federal cabinet advocating for amendments to rules of procedure to streamline leadership appointments.
Discussions also centered on the government’s commitments under the International Monetary Fund (IMF) Extended Fund Facility (EFF) framework, which outlines the phase-out of incentives and prohibition of sales from EPZs to the domestic tariff area. Senator Mandviwalla urged the private sector stakeholders and the Ministry of Industries and Production to collaborate closely in formulating unified proposals ahead of upcoming IMF review meetings.
To address these concerns effectively, the committee directed automotive stakeholders to formally submit their grievances and announced plans to convene a joint meeting with officials from the Ministry of Commerce and the Ministry of Industries and Production next week to reach a comprehensive resolution.
The meeting was attended by Senators Syed Masroor Ahsan, Khalida Ateeb, Husna Bano, Special Assistant to the Prime Minister and Secretary, Ministry of Industries and Production, along with senior officials and relevant stakeholders.
Copyright Business Recorder, 2026