Tariff anomaly threatens auto sector

PAMA seeks PM intervention, warns local manufacturing unviable after Finance Act 2026

LAHORE:

The Pakistan Automotive Manufacturers Association (PAMA) has urged Prime Minister Shehbaz Sharif for urgent intervention to protect the country's auto industry, warning that recent tariff anomalies threaten investments of over $5 billion and livelihoods of nearly 2.5 million families.

In a letter, PAMA Director General Abdul Waheed described a deeply alarming and rapidly deteriorating crisis facing the automotive sector, which poses a serious threat to industrial stability, employment, investment, and the wider national economy. The sector comprises 16 assemblers producing over 100 vehicle models under 31 international brands. Despite operating in a highly compressed and challenging market environment, the industry has sustained average annual production of approximately 250,000 units, the letter stated.

The letter said that under successive automotive policies, cumulative investments have surpassed $5 billion, while the industry and its extensive supply chain provide livelihood opportunities to nearly 2.5 million Pakistani families.

Following parliamentary approval of the Finance Act 2026, the industry is confronted with an unprecedented crisis. The revised tariff structure has resulted in completely built?up imported vehicles and commercially imported parts being placed at duty rates lower than industrial CKD kit imports. The reduction of CBU duty on vehicles below 850cc has significantly eroded the viability of local manufacturing in this segment.