New Auto Policy Could Be Approved Today

Prime Minister Shehbaz Sharif has called a meeting to review Pakistan’s long-delayed automotive policy, and the plan could be approved today if he is satisfied with the proposed framework. The draft, known as the Automotive and Auto Parts Manufacturing Policy 2026–31, is meant to guide the country’s car industry over the next five years. The previous policy expired on 30 June 2026, leaving manufacturers and consumers waiting for clarity on what the government plans to do next.

The long delay has left automakers uncertain, and many have put off decisions on production and vehicle prices. Sharif had asked an inter-ministerial committee led by the law minister to review and finalise the draft. The committee recommended changes, including a broad restructuring of the automotive sector.

The proposed framework aims to get more locally made auto parts into global supply chains and make domestic manufacturers more competitive internationally. It also seeks to attract investment, increase local value addition and support the uptake of electric vehicles. Another key proposal is to lower automobile tariffs gradually, which could sharpen competition in the industry and potentially make vehicles more affordable for consumers.

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The committee has recommended seven broad principles for transforming the automotive industry. The framework also sets export targets aimed at expanding Pakistan’s presence in international markets. Closer integration into global value chains is expected to create opportunities for local auto-parts manufacturers and encourage improvements in production capabilities and technology.

The policy is also intended to give businesses a clearer long-term framework for investment and manufacturing decisions. Its proposed measures could affect localisation, vehicle pricing, electric vehicle adoption and the development of Pakistan’s automotive supply chain.

A decision on the policy could end months of uncertainty for the industry. However, the final provisions and implementation timeline will depend on what the government decides about the proposed framework.