Pakistan auto policy 2016-21: Good new for new Automakers


Pakistan auto policy 2016-21

Khawaja Asif is heading the committee that is going to approve the auto policy for the country and is also currently the Minister for Power and Water. He clearly stated that their aim is to bring in new automakers in the industry therefore they are going to spellbind new ones through different incentives offered to them.

Many months of uncertainty finally came to end on Friday when all details concerning the Automotive Development Policy for the year were announced by Asif at the press conference after Economic Coordination Committee’s approval.

The existing automakers who have been offering overpriced vehicles as well have been lazy at offering new promotions and showing the spirit of competition have been taken to account while those who have just entered the market and those who have stopped their production have been given advantages if they get back their gear.

Arif Azeem, Secretary Industries, CEO Engineering Development Board (EDB) Tariq Ijaz Chaudhry and Board of Investment (BoI) Chairman Miftah Ismail have also been in compliance with Asif.

The policy’s main aim is to introduce positive competition in the Japan dominated trio of automakers in the market.

Khawaja Asif states that this policy has been made so because over two years exploitation by the makers has been seen. The motorcycle industry has established itself well but in the car industry, old car assemblers have not even yet acquired the status of becoming carmakers.

Vehicle import at commercial level is prohibited in the country while foreign made cars on self level have high customs and duties applicable on them.

Even then since over 30 years, local car brands are still using old mainstream technology for assembling their cars so their incentives haven’t been made use of by their users.

Due to this drivers are forced to drive lesser tech based cars whereas producers are also unable to import cars as they are nothing when compared at the global level.

Anti lock braking system (ABS) and Euro-fuel issues are some that need to be sorted out since some do not have these main features.

With the rest of the world using Euro 6, we are still at Euro 2 fuel usage.


According to Asif’s claims, this new policy shall enable the auto makers to dominate the market while Miftah says that this way new entrant’s competition shall lead to reduced car costs since 2 to 2.5 percent price reductions have also been done for vehicle parts in the policy.

The newcomers shall pay 10 pc customs during their initial five years for all imported parts in comparison to normal 32.5 pc whereas the existing makers shall be paying 2.5 pc lesser i.e. 30 pc from July 2016 to 2017. Local parts for initial five years shall be available for newcomers at 25 pc duty that was 50 pc for all whereas for existing ones, the duty is at 40 pc now.

In order to train for the usage of Euro-4 fuel in cars, an automobile institute shall also be made by the government as reported by the CEO of EDB.


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