Future of Wheels in Pakistan

Electric Mobility, Competitiveness & Localization

This year a symposium was held at PAPS Show 2026 in Lahore organized by Iftikhar Ahmed Former Chairman PAAPAM. The Symposium brought together government representative, economists, technology experts, OEM representatives and engineering SMEs to discuss the future direction of Pakistan automotive industry.

Pakistan’s automotive industry is entering a new phase – From ICE vehicles toward hybrids, plug-in hybrids and new-energy vehicles is presenting an opportunity but also a strategic choice in Pakistan.

This question shaped the discussion at the PAAPAM symposium, “Future of Wheels in Pakistan: Electric Mobility, Competitiveness, Localization & Electric Mobility,”

The discussion covered a broad range of issues from tariffs and EVs to technology, vendor development, exports, energy costs and policy stability. Together, the presentations highlighted a central requirement: Pakistan must use the automotive transition to strengthen its manufacturing capabilities rather than simply expand assembly.

Rana Ihsaan Afzal Khan: Tariffs Are an Instrument, Competitiveness Is the Goal

Rana Ihsaan Afzal Khan, Coordinator to the Prime Minister, emphasized the importance of the automotive ecosystem beyond vehicle assembly.

The industry supports a much wider network involving steel, plastics, rubber, software, logistics, designing, tooling and engineering services. The figures discussed at the symposium indicated around 2,200 component manufacturers and approximately 3,500 engineering SMEs connected with this broader industrial base.

He stressed that tariffs should not be viewed as the final objective of industrial policy.

“Tariff is an instrument; the destination is competitiveness.”

This becomes particularly important as Pakistan moves toward new-energy mobility. The question is whether the country will become primarily an importer of EV components, an assembler, or a manufacturer.

The government is also considering increased production of L6 and L7 vehicles, while EV adoption could contribute to reduced oil imports and lower emissions.

But these benefits will be greater if the transition also creates domestic manufacturing capability.

Rana Ihsaan emphasized the need to identify productivity gaps, close them and continuously monitor improvements. The same discipline, he suggested, should apply to the broader concept of Made in Pakistan.

Mr. Asif Saeed Khan Lughmani, Additional Secretary, Ministry of Industries & Production, addressed the policy environment in which the industry must operate.

Pakistan is moving toward greater liberalization and must also fulfil international commitments. The challenge, therefore, is not simply whether the country should liberalize or protect domestic industry.

How can liberalization lead to greater competitiveness and domestic value addition?

The transition to EVs and other new-energy technologies provides an opportunity to establish new domestic capabilities but only if policy encourages investment, technology development and local production.

Economist Mr. Ashfaq Tola focused on the importance of long-term policy stability.

He therefore emphasized the importance of sustainable, predictable policies capable of giving investors confidence.

Tola also highlighted the need to improve productivity, address energy costs and attract FDI linked to export-oriented production.

Foreign investment should contribute not only capital but also technology, production capability and access to international markets.

From the OEM perspective, Mr. Faisal highlighted the rapid transformation taking place in Pakistan’s automotive market.

The market now includes a much wider range of brands, models and technologies, including HEVs, PHEVs and new-energy vehicles.

The consumer is becoming an increasingly important driver of change. Buyers are comparing technologies, prices, features and operating costs across a much broader range of vehicles.

Battery costs were also discussed as an important factor in EV affordability. The battery component of vehicle cost has declined significantly from historical levels, improving the potential economics of electric mobility.

However, taxation and incentives remain important in determining how quickly consumers adopt new technologies.

The message from the OEM perspective was that Pakistan needs a stable policy framework that allows manufacturers and consumers to plan for the technological transition.

Mashood Khan: Pakistan Must Build the Supply Chain, Not Replace It

Representing engineering SMEs, Mashood Khan focused on supply chains, partnerships and indigenization.

Pakistan has already developed a significant base of automotive and engineering manufacturers. The challenge is to connect these companies more effectively with OEMs, international technology providers and global customers.

His central proposition was that localization, technology and partnerships must develop together.

Pakistan’s domestic automotive supply chain has faced growing competition from imported components, including CBU, CKD and SKD-related imports. If imports increase without corresponding localization, domestic manufacturing capability can weaken.

Mashood Khan posed the fundamental question:

“Are we aiming at industrialization or an assembly-based economy?”

Industry figures discussed at the symposium indicated existing localization levels of approximately:

• Cars – 65% • Tractors – 90% • Two-wheelers – 90% • Trucks and buses – 40% • NEVs – currently almost zero

Against this background, he questioned whether future targets for some categories should be below levels, already achieved by local manufacturers.

The objective, he argued, should be to build on existing industrial capability and move toward higher localization and stronger exports.

Mashood Khan also highlighted the international automotive aftermarket as a major opportunity for Pakistani manufacturers.

The global aftermarket was discussed as a market of approximately USD 2.4 trillion, while Pakistan’s current share remains very small.

This creates considerable room for growth, particularly in Europe, the United States and Africa.

Pakistan should not focus only on large vehicle components. Smaller accessories and niche products can also provide practical entry points for SMEs.

However, international buyers demand quality, reliability, certification and consistent delivery.

For this reason, Pakistan needs stronger testing, validation and certification infrastructure.

The objective should be to create manufacturers capable of meeting international standards and developing long-term relationships with global distributors.

As Mashood Khan put it, Pakistan needs more “Export Entrepreneurs” companies that build their business around international markets rather than treating exports as an occasional activity.

Two areas discussed as examples of potential export growth were aluminium automotive parts and forged components.

The combined global aftermarket opportunity for these areas was cited at approximately USD 180 billion.

Pakistan does not need to capture the entire market. Even a small share could generate meaningful export revenues if domestic manufacturers have access to appropriate technology, raw materials, financing, testing and international buyers.

The challenge is to create the ecosystem that allows SMEs to make the required investments.

Mashood Khan proposed five practical areas for government and industry cooperation:

Develop specialized automotive and SME engineering clusters in Karachi and Lahore, providing shared infrastructure and access to technology, testing, training and supply-chain services.

Facilitate affordable long-term financing for modern machinery, automation and production technology, with financing structures suitable for SMEs.

3. Technical Partnerships and Joint Ventures

Government institutions can help Pakistani manufacturers identify international technology partners and establish technical agreements and joint ventures.

Domestic raw materials are most essential for exporter to compete globally to enhance export from Pakistan. Initially Import data can be used to identify strategically important engineering materials that Pakistan imports in significant quantities. International suppliers can then be encouraged to establish manufacturing partnerships with Pakistani companies.

Once viable projects are identified, government can facilitate appropriate industrial land and infrastructure for manufacturing and joint-venture projects.

These measures would help connect technology, manufacturing capacity and international markets.

“30 Countries, 30 Distributors and 30 Deals”

One practical proposal was the concept of:

30 Countries – 30 Global Distributors – 30 Deals

Pakistan Auto Show can become a platform for bringing international aftermarket distributors and Pakistani manufacturers together.

TDAP, commercial counsellors and Pakistani diplomatic missions can play an important role in identifying potential buyers.

The objective should be measurable: bring serious buyers to Pakistan, connect them with manufacturers and convert business meetings into commercial relationships.

Technology expert Prof. Dr. Azam Amjad emphasized localization, job creation and technology upgrading.

Pakistan needs a stable industrial policy that allows manufacturers to improve gradually while preparing for greater international competition.

Technology transfer should therefore become an integral part of automotive development.

The EV transition creates opportunities in new areas, but Pakistan must develop the ability to absorb and use those technologies rather than remaining dependent on imported systems.

The objective should be to move progressively from technology adoption toward technology capability and eventually technology-based exports.

Aamir: Competitiveness Begins With the Industrial Environment

Auto-parts manufacturer Mr. Aamir highlighted several structural barriers facing Pakistani manufacturers.

• Lack of trust between government and the private sector;

• Broader constraints on industrial competitiveness.

This symposium proved to be a platform where most meaningful discussions were held. The symposium gave a thought that automotive policy must look beyond vehicles assembly. It also demonstrated that Pakistan Automotive Industry future cannot be separated from the future of its engineering SMEs.

Published in Automark’s October-2026 printed and digital edition.