ISLAMABAD – The federal government has initiated work on the “Auto Industry Development and Export Policy 2026-31” aimed at making car ownership more accessible for citizens and revitalizing the struggling auto sector.
Under the proposed policy, discussions with the State Bank of Pakistan and industry stakeholders include extending car financing up to seven years, reducing down payments to 15 percent, and raising financing limits for locally produced vehicles to Rs10 million.
The policy also emphasizes consumer protection, with fixed booking prices, booking deposits capped at 20% of total cost, and penalties of 3% for manufacturers delaying vehicle delivery by over 30 days. Warranty responsibilities will rest entirely with local manufacturers.
Additionally, gradual regulation of used car imports and phased elimination of import tariff premiums by 2030 aim to encourage healthy competition and affordable vehicles.
Electric and new energy vehicles (NEVs) will receive special attention, with plans to establish 3,000 charging stations nationwide by 2030. Electric vehicles will enjoy full exemption from registration and token taxes in Islamabad, while government fleets will transition to electric vehicles starting December 2027.
The five-year policy aims to boost annual vehicle production to 500,000 units, achieve $1 billion in auto exports, and significantly increase local parts production (localization), strengthening the auto sector’s contribution to Pakistan’s economy.
