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Pakistan Targets 40% Local Production of Car Parts
The Pakistani government has introduced a new automobile policy that mandates increasing the local production of car parts from 10% to 40% over the next five years. This initiative, as outlined by Prime Minister’s Adviser Haroon Akhtar Khan, emphasizes localization, exports, vehicle quality, and consumer safety. The policy seeks to uplift domestic auto-parts manufacturers and create job opportunities while offering various incentives to exporters. Additionally, it includes measures to ensure compliance with international safety standards and facilitate inspections of imported vehicles.
MonitorConfidence: HighMid term horizonStory: First report
EvidenceOfficial announcementNo quotes
Published 7 Oct 2026, 18:30 UTC1 min read
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Brief
NewsBite reading:Pakistan's New Policy Aims for 40% Local Car Parts Production
TL;DR
- Localization of car parts to rise from 10% to 40% in five years.
- Policy aims to support domestic auto-parts manufacturers and create jobs.
- Exporters will receive incentives under the Drawback of Local Taxes framework.
- Pre-inspection requirements for imported vehicles will remain.
- Compliance with 69 regulations under the WP-29 Convention will be mandatory.
Interesting facts
- The increase in localization is expected to significantly enhance the local manufacturing ecosystem.
- The policy focuses on balancing the interests of consumers and manufacturers.
What changed
The government has proposed raising the local content requirement for car parts significantly to 40%.