Regressive laws blamed for Yamaha's exit

"Yamaha's exit from a country with the 5th largest population in the world, where motorcycles are the preferred mode of transport for more than 80% of the people, is a sorry state of affairs." This was stated by Abdul Waheed Khan, Director General, Pakistan Automotive Manufacturers Association (PAMA).

According to media reports, Yamaha Motorcycles Pakistan Limited, in a letter addressed to its dealers, informed them of its decision to discontinue operations in Pakistan, 10 years after its return in 2015.

"Yamaha had made significant strides in indigenisation, job creation, technology transfer, and skills development. In the two-wheeler industry, after Honda, only Yamaha was able to localise engine production in Pakistan. This is no small feat by any means," he added. Established with an investment of around $100 million, Yamaha's presence was considered a milestone in the local automotive landscape. The company followed global best practices and was regarded as a principled business organisation. "It is a shame, but it had to exit due to the regressive policies of the government," Waheed observed.

Explaining the possible reasons behind Yamaha's decision, he said the automotive industry is subject to mandatory export requirements. Any company unable to achieve its targets becomes ineligible to import raw materials and components for manufacturing. "This regressive law, enacted against ground realities, is proving to be the last nail in the coffin of an already struggling auto industry," Waheed remarked.

To make matters worse, the recently promulgated "Motor Vehicle Development Act 2025" has further alarmed industry players. The act places routine and petty business matters under criminal law that were historically dealt with under civil law. As a result, prominent business leaders can be arrested and handed prolonged sentences for minor issues. "This is catastrophic for foreign investors and not acceptable at all," Waheed stressed.

The DG PAMA noted that the automotive sector is already grappling with economic uncertainty, regulatory short-sightedness, rupee devaluation, heavy taxation, high costs of doing business, and a shortage of foreign exchange. "Foreign direct investment is negligible, and many globally recognised organisations have already left Pakistan," Waheed added.