Local automobile production to reach 300,000 units by year end

To utilise the maximum potential of the automobile industry in job creation and economic uplift of the country the government has decided to focus on the development of the automobile industry of Pakistan. The new auto policy has also been completed and would be presented before the Cabinet in the first week of August.

Federal Minister for Information Fawad Hussain Chaudhry, Khusro Bakhtyar in a statement said that the auto sector has the potential to drive the entire economy of the country and it has 7.81 percentage in Large Scale Manufacturing. This sector also plays a very important role in job creation as every 1 car being manufactured provides 5 new jobs.

To incentivise the industry the government has removed federal excise duty (FED) and additional customs duty (ACD) on cars along with reduction of sales tax on small cars. After the implementation of the government plan, the prices of cars are expected to be reduced as under: (i) Below 850cc car price will reduce by Rs104,458–Rs142,388 approximately (iii) Car prices of over 1000cc to 1,500cc will be reduced by Rs112,118- Rs186,375,(iii) Expected decrease of more than Rs169,958 of 1800cc cars category,(iv) above 2000cc car price will reduce by more than Rs229,458, and(v) Price reduction is expected in each vehicle category being manufactured locally.

The manufacturing of automobiles will also increase in the country with a target of 300,000 for next year and up to 500,000 by 2025.

Furthermore to promote Electronic Vehicles (EVs) following incentives are allowed to increase the number of imports of EVs: (i) Customs Duty (CD) on specific parts for electric vehicles to attract one percent and (ii) 10 percent CD on import of CBUs of EVs.