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Competition Commission calls for policy, financing, and regulatory reforms to boost Pakistan’s auto industry.
Aftab Maken
ISLAMABAD: The Competition Commission of Pakistan (CCP) has released a landmark report, “The Road to Fair Competition – A Study of Pakistan’s Automobile Industry,” highlighting structural and regulatory challenges and recommending sweeping reforms to enhance competition and efficiency.
The report stresses the need for a long-term policy framework, expanded vehicle financing, and removal of regulatory distortions. The automobile sector contributes roughly 2.8 percent to Pakistan’s GDP and employs over 215,000 people directly, making it a crucial segment of Large-Scale Manufacturing. Passenger cars, including emerging electric vehicles, drive domestic value addition and technology transfer, the study noted.
Despite repeated policy interventions, CCP findings show the passenger car market remains concentrated, with high entry barriers and capital-intensive requirements discouraging new entrants. Past protectionist measures helped establish domestic production but failed to deliver consistent competition or export-led growth. Regulatory overlaps and policy inconsistencies further constrained investment, according to the report.
To improve affordability and stimulate demand, the CCP recommended reviewing restrictive financing limits and introducing targeted, subsidized schemes for first-time buyers. The study also emphasized the urgent need for a coordinated transition to electric vehicles. Key challenges include limited charging infrastructure, inadequate domestic production, and reliance on fossil-fuel-based electricity. CCP said stable policies and infrastructure investment are critical to attracting long-term private investment in EVs.
The report highlighted the absence of a structured vehicle scrappage policy. A phased disposal scheme could reduce environmental hazards, improve road safety, and stimulate demand by replacing obsolete, high-emission vehicles. Strengthening domestic vendor development through transparent localization policies was also urged, enabling integration with global supply chains.
CCP recommended gradual rationalization of trade protections, elimination of regulatory asymmetries, and adoption of pro-competition policies to encourage investment, innovation, and efficiency. The commission said a more competitive auto sector would benefit consumers with lower prices, better quality, wider choice, and higher export potential.
The study aims to guide policymakers, regulators, and industry stakeholders toward a globally integrated, modern automobile sector. It has been uploaded on the CCP website for public feedback and suggestions. According to past PSX filings and National Fertilizer Development Centre reports, industrial policy consistency and financing reforms are key to maintaining sustainable growth in capital-intensive sectors like automotive manufacturing.
