Pakistan’s local auto industry and its suppliers are facing growing uncertainty ahead of the FY26 budget, as the International Monetary Fund (IMF) is reportedly urging the government to rationalise auto tariffs and allow the commercial import of used vehicles.
The IMF views Pakistan’s auto sector as overly protected, advocating for reduced tariffs to enhance competitiveness and efficiency, ultimately benefiting consumers. Currently, locally assembled vehicles are subject to over 40% in taxes and duties.
On May 6, representatives from auto manufacturing and parts supply firms met with Special Assistant to the Prime Minister (SAPM) Haroon Akhtar Khan in Islamabad to voice their concerns. Industry stakeholders warned that permitting commercial imports of used cars and lowering tariffs on Completely Built Units (CBUs) beyond a certain limit could threaten the viability of the local industry.
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In response, SAPM Haroon Akhtar reassured the delegation that the government remains committed to safeguarding domestic investment and the sustainability of the local auto sector. He emphasized that any policy changes would be made in consultation with industry stakeholders to ensure a balanced and fair tariff structure.
