Pakistan’s automotive sector is at a critical juncture, navigating a complex landscape shaped by government policy and economic pressures. The recent Auto Parts Summit, organized by the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), became a forum for a heated debate on the future of local manufacturing.
The core of the issue, as articulated by PAAPAM Chairman Usman Malik, is the government’s dual approach: promoting an environmentally friendly electric vehicle (EV) policy while simultaneously allowing the commercial import of used petrol and diesel cars. Malik contends that this contradictory stance is a recipe for disaster, as it undermines the very industry it claims to support. “Our policymakers are moving in the opposite direction to destroy the local auto parts manufacturing industry,” he warned, stressing that once damaged, an industry is incredibly difficult to revive.
Currently, over 1,200 local auto parts manufacturers contribute a significant three percent to the nation’s GDP and provide employment for two million people. This industry is also a noteworthy exporter, with $200 million in parts, built to international safety standards, being sold annually. Furthermore, locally manufactured Millat Tractors are even exported to the USA, showcasing the sector’s capability to meet global quality standards.
Despite these achievements, a major concern is that many local operators are merely assembling imported CKD (Completely Knocked Down) kits rather than genuinely fostering local manufacturing. This over-reliance on imported components diminishes the industry’s self-sufficiency and makes it vulnerable to policy shifts.
However, there is a glimmer of hope from the government’s side. Haroon Akhtar Khan, Special Advisor to the Prime Minister (SAPM) on Industries and Production, assured summit attendees that the government is committed to driving industrialization through policies designed to make local manufacturers globally competitive. Khan emphasized that Pakistan possesses the essential ingredients for industrial transformation—human capital, strategic location, and natural resources—and that the current leadership has the political will to implement forward-thinking industrial policies.
The SAPM encouraged industrialists to invest in new technology and research, urging them to collaborate with the government to transform Pakistan into a regional auto hub. He reiterated the prime minister’s special instructions to make the local auto parts industry competitive on an international scale, signaling a potential shift toward a more protectionist stance.
The summit underscored a fundamental tension: the need for policies that attract investment and foster growth, versus the imperative to protect existing domestic industries from damaging competition. While the government speaks of a future of industrial transformation, the industry fears its present is being eroded by conflicting policies. The path forward remains uncertain, but one thing is clear: the decisions made today will define the fate of Pakistan’s automotive sector for years to come.
