CCP urges major reforms to boost competition in Pakistan’s auto sector

The Competition Commission of Pakistan (CCP) has called for sweeping reforms in Pakistan’s automobile industry, warning that persistent regulatory distortions, policy inconsistencies, and high entry barriers continue to stifle competition and limit consumer benefits.

In its report, “The Road to Fair Competition – A Study of Pakistan’s Automobile Industry,” the CCP highlighted market concentration in the passenger car segment, fragmented regulations, and capital-intensive requirements that discourage new entrants. While past protectionist policies helped establish domestic production, they have not consistently delivered competitive outcomes, affordability, or export-led growth.

The report notes that the automobile sector contributes around 2.8% to GDP and employs over 215,000 people directly, playing a crucial role in industrial growth, technology transfer, and domestic value addition, particularly in passenger cars and emerging electric vehicle (EV) segments.

To address structural and affordability challenges, the CCP called for expanding vehicle financing, including targeted support for first-time buyers, alongside a predictable and coordinated transition to EVs, supported by adequate charging infrastructure and domestic production capacity. It also emphasized the need for a structured vehicle scrappage and phase-out policy to remove obsolete, high-emission cars and stimulate demand, while strengthening domestic vendor development through transparent localisation policies.

The commission stressed that rationalising protectionist measures, removing regulatory asymmetries, and adopting stable, pro-competition policies are essential to attract investment, encourage innovation, and improve efficiency. According to the CCP, a more competitive auto sector could deliver lower prices, better quality, broader consumer choice, and stronger export potential. The report aims to guide policymakers, regulators, and industry stakeholders toward building a modern, globally integrated automobile industry in Pakistan.