With the current auto policy soon expiring in June 2026, it is unfortunate that targets fixed under it between 2007 and 2025 have remained largely unmet owing to multiple reasons, but primarily due to the lack of consistent implementation by the government of its own policies.

As per a report prepared by the Pakistan Automotive Parts and Accessories Manufacturers Association (Paapam), the low demand of vehicles, dwindling share of the auto sector in the gross domestic product (GDP), inconsistent policies, misusing the used-car import scheme, slow employment growth and exports were some of the main issues that were targeted and never achieved by successive governments.

AIDP 2007-2012

A quantitative benchmark analysis under the Auto Industry Development Policy (AIDP 2007-2012) reveals that the auto sector contribution to the GDP was 2.3 per cent as against the target of doubling the GDP contribution to 5.6pc.

‘The local assemblers have followed the government’s policy 100pc; the problem is with the state’s implementation of the promises’

In the above tenure, car production was targeted to achieve 500,000 units (critical mass), but it only stood at 176,000 units. Exports were planned to reach $650 million, but struggled to increase due to a lack of government support. Despite all these failed targets, exports currently stand at over $200m with the potential to achieve much higher levels.

Moreover, plans were made to develop high-value and critical components locally, but that target was missed as well. Even though engines and transmissions were assembled locally, their critical parts continued to be imported........

© Dawn Business