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Automobiles
The automobile sector in Pakistan comprises assembling/manufacturing units for 2-wheelers, 3-wheelers, passenger cars, vans/LCVs/pick-ups, jeeps, trucks, buses, tractors, prime movers, and trailers. It contributes approximately 4 percent to the GDP and represents around 15 percent of the large-scale manufacturing (LSM) sector. Over the past four decades, the country has developed a strong engineering base with investments from international brands and technology transfers.
Key Statistics of the Automotive Sector
In 2020 the government of Pakistan introduced an Electric Vehicle Policy which covers 2-3 wheelers, buses, and trucks. It provides guidelines and incentives to promote the adoption of electric vehicles in these segments, fostering sustainability and reducing reliance on fossil fuels in transportation.
Areas for Investment:
Assembling cars: The passenger car segment contributes the highest share in terms of both volumes and value.
Manufacturing of auto parts: A higher tariff structure on the imports of spare parts incentivizes the localization of the auto parts.
Assembling of EVs: immense investment opportunity in the manufacturing of EVs, including their value chain.
- Fleet Operation: CPEC and other mega projects provide a significant opportunity for the trucking sector.
Incentives Automobiles/Auto Parts:
Reduced Customs duty on import of CKD kits of small cars up to 850cc.
Exemption from Value Added Tax (VAT) on small cars.
No Advance tax on import of Motor vehicles up to 1000 cc.
Low Customs Duty on Import of Hybrid Vehicles Parts.
Low Customs Duty for Vehicle Assembly (New Make or Model).
Low custom duties on Automotive Parts of Vehicles.
Low Custom Duties on Vehicle Assembly (TBS Regime).
Incentives Electric Vehicles:
No customs duty on import of plant and machinery for manufacture of EVs.
No Sales Tax on imports of CKD kits of EVs.
Low rate of Customs Duty on import of EV CKD & Specific Parts.
Concessionary rate of Customs duty on import of Completely Built EV Units (CBU’s).
Low Customs duty on import of Electric Vehicle Chargers.
VAT Exemption on CBU/CKD import of certain types of Electric Vehicles.
Exemptions of Custom duty on Inputs for manufacturing EVs.
Low custom duty on hybrid electric vehicles
Low rate of sales tax on electric vehicles locally manufactured or assembled
Categories of new Investment
MR. ZULFIQAR ALI
Director
Prime Minister’s Office
Board of Investment
Tel: 051-9206164
MR. USMAN ALI
Deputy Manager
Engineering Development Board (EDB),
Ministry of Industries & Production
Tel: 051-9210285
MR. ZAKRIA KHAN
Assistant Chief
Engineering Development Board (EDB),
Ministry of Industries & Production
Tel: 051-9202899