Auto policy 2026–31 faces criticism over secrecy, industry seeks clarity

Pakistan’s upcoming auto policy for 2026–31 has drawn criticism from industry stakeholders over a lack of transparency, with key players saying they remain unaware of its final contents despite its submission to the Prime Minister’s Office, according to a news report. 

Hamad Ali Mansoor, Chief Executive Officer of the Engineering Development Board (EDB), confirmed that the draft had been finalised and sent to the Prime Minister’s Office, with details to be made public after approval.

Officials indicated that electric vehicles may feature prominently in the upcoming framework, with plans for new manufacturing facilities and lower-cost vehicle options under consideration.

However, Ali Asghar Jamali, Chief Executive Officer of Indus Motor Company, said the industry had not been informed about the final draft despite earlier consultations, noting that multiple drafts had been circulated without clarity on the approved version.

Industry representatives said the final policy was not shared for feedback, diverging from past practice where draft policies were made public for consultation.

Stakeholders warned that limited disclosure could affect investor confidence and long-term planning, as businesses require policy clarity to guide investment decisions.

Analysts pointed to structural issues in policymaking, noting that centralised decision-making can create communication gaps between regulators and industry, particularly between Islamabad and Karachi.

The sector continues to face structural challenges, including declining localisation levels, with new entrants relying on imported components rather than developing local vendor networks.

According to industry data shared during an engagement hosted by Indus Motor Company, the automotive sector contributes around 2.8% to GDP and employs approximately 1.8 million people, but utilisation of installed capacity has dropped to about 30% from 84% in 2017-18.

Over the past decade, Pakistan’s auto market has grown by around 15%, compared to higher growth rates in regional markets such as India and Vietnam.

Industry officials said inconsistent policies, high taxation and rising imports of used vehicles have contributed to the slowdown, while stressing the need for a stable and predictable policy framework to support future investment.