Business Recorder
LAHORE: The Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has warned the government that ignoring localisation in the Auto Policy will badly hit the steel melting industry. In a statement on Monday, Chairman PAAPAM Usman Aslam Malik said the PAAPAM has been in continuous dialogue with the government over the past year on the forthcoming Auto Policy 2026-31. “PAAPAM’s stance is clear that without protection of the job-creating local auto parts industry, the policy loses all rationale.” If localisation is ignored, it would be better to abandon the policy, allow imports of completely built up vehicles, and accept the collapse of the domestic industry rather than wait for it to happen gradually. He stated that the auto policy must be anchored in a competitive local parts industry, warning that without strong tariff safeguard and enforcement, Pakistan’s vendors cannot survive against a 34 percent cost disadvantage to produce in Pakistan, a country with high energy cost, high interest rates and high taxation. He emphasised that customs duties of 50–60 percent on CBU imports and a minimum 45 percent duty on localised parts are essential safeguards, while raw materials must remain duty free to reduce vendor costs. Senior Vice Chairman Shehyar Qadir added that uniform CKD tariffs across ICE and NEV categories are critical to ensure fairness, and that NEV definitions must be tightened to exclude plug in hybrids and range extended vehicles from reduced tax regimes, since they are not zero emission and are equipped with up to 1,500cc engines, fuel tanks and exhaust systems. He stressed that any concessionary sales tax must extend across the entire localised manufacturing chain, including vendor inputs (local or imported), to prevent erosion of domestic value addition. Both leaders underscored the importance of strengthening SRO 693 with a unified parts registry, bi-annual reviews, and inclusion of engine and transmission assemblies to deepen localisation. They further called for strict CKD definitions, value caps on EV components to avoid cost-transfer, and consistent enforcement to block loopholes and provide long term certainty for vendors. They called upon the government to adopt these measures to secure Pakistan’s industrial base, protect jobs, and preserve national self reliance. If localisation is abandoned, the auto policy itself must be abandoned too because without local industry, Pakistan’s auto sector has no future, they remarked. Copyright Business Recorder, 2026
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