ISLAMABAD (PEN) : Leading players in Pakistan’s automotive industry have announced plans to begin exporting vehicles assembled and manufactured locally. Industry insiders highlight that trade agreements with importing nations are crucial to boost these exports, as required under the Auto Policy 2021-2026.
Key stakeholders, including major companies like Indus Motor Company and Pak Suzuki, have proposed that the government should negotiate trade deals with countries where Pakistan intends to export its vehicles. Such agreements would facilitate exports by easing tariffs.
The Auto Industry Development and Export Policy 2021-26 (AIDEP) was introduced in 2021, setting ambitious goals for the industry to enhance localization rates and initiate exports. The policy aims to phase out incentives for local car assemblers, creating an open playing field for new entrants. Indus Motor and Suzuki have formally announced plans to export their models, aligning with the policy’s requirements, while other companies have yet to follow.
Indus Motor Company (IMC) launched its export initiative at a ceremony at its manufacturing facility in Port Qasim Authority, Karachi. The event featured Federal Minister for Industries and Production Rana Tanveer Hussain, CEO of the Engineering Development Board (EDB) Engineer Khuda Buksh, representatives from the Special Investment Facilitation Council (SIFC), several government officials, and top leadership from Toyota, including Executive Vice President of Toyota Motor Asia, Kazunari Iguchi.
This milestone underscores IMC’s strategic plan to export vehicles and parts, significantly contributing to Pakistan’s economy and the global automotive market. The company plans to export models like the Toyota Fortuner, Hilux, and Corolla Cross to Oceanian countries, demonstrating IMC’s dedication to advancing Pakistan’s automotive industry internationally.
Federal Minister Rana Tanveer expressed pride in Indus Motor’s contribution to exports, stating, “The government’s AIDEP 21-26 policy aims to boost the automotive sector by encouraging the export of localized parts and vehicles. IMC’s proactive approach sets a benchmark for others in the industry. We are committed to supporting the auto industry in every possible way.”
Kazunari Iguchi remarked, “Our partnership with IMC has been immensely fruitful. At Toyota, we believe in building people before we build cars, and this step testifies to the improvement of skills and training of human resources in Pakistan. We look forward to continued collaboration and success, contributing to Pakistan’s growth.”
Ali Asghar Jamali, CEO of Indus Motor Company, stated, “Seeing the ‘Make in Pakistan’ dream cross international borders is a significant moment for us and Pakistan. We thank all our stakeholders for their support and trust. Becoming part of Toyota’s global supply chain affirms our commitment to putting Pakistan on the world map and strengthening its economy. This step highlights our capability to compete globally, and we are confident our products will be well-received. Moving forward, we aim to make Pakistan’s auto industry a symbol of reliability and quality globally.”
Pakistan’s auto industry has historically struggled with localization. The government provided incentives to major players, allowing them to dominate the market and hindering new entrants. Over the past two decades, five-year auto policies have attempted to address this issue.
The first policy aimed to protect localization by ensuring local investment. However, the second policy (2011-2016) failed to increase competition, promoting the import of fully assembled cars instead of localization. The third policy (2016-2021) was more successful in increasing competition but primarily attracted investments in the upper segment and SUV categories, neglecting lower segments.
In 2021, the government introduced incentives for new technologies such as hybrid electric vehicles (HEVs) and battery electric vehicles (BEVs). The CKD HEV incentive aimed to attract investment and technology upgrades in local vehicle manufacturing.
