LAHORE:
The passage of the Motor Vehicle Industry Development Act 2025 has alarmed Pakistan’s auto sector. Stakeholders fear the legislation will disrupt the industry’s fragile recovery and criminalise legitimate business practices.
The Pakistan Automotive Manufacturers’ Association (PAMA), the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), and independent analysts argue the Act was drafted in haste without proper consultation. They say the government should focus on supporting growth instead of adding hurdles.
“This law appears to criminalise manufacturing and trade without justification,” said PAMA Director General Abdul Waheed Khan in a letter to the Ministry of Industries. He added that “involving the FIA is especially troubling” and that the bill does not strengthen consumer protection beyond the Auto Industry Development and Export Policy (AIDEP) 2021-26, already in effect until 2026.
PAAPAM also criticised the Act, saying vendors were ignored despite forming the backbone of the supply chain. A senior representative said rising costs, volatile exchange rates, and falling demand already strain parts makers. “Instead of support, this bill creates fear and uncertainty. The industry needs facilitation, not penalisation,” he said.
Independent analysts noted the Act introduces strict penalties when the sector is shrinking. One expert, speaking on the condition of anonymity, said auto industries worldwide need long-term policy stability, but in Pakistan, recovery is disrupted by sudden changes. “The Act reflects short-term thinking and may scare away investors,” he warned. The data paints a grim picture. Car sales plunged 52% in three years, from 234,180 units in FY2021-22 to 112,203 in FY2024-25. Tractor sales halved to 29,192 units, while two- and three-wheeler sales dropped 17%.