The government's new Automotive Industry Policy aims to gradually reduce vehicle prices, while transforming the auto sector into a competitive, export-oriented manufacturing industry through greater localisation, improved safety standards and promotion of electric vehicles. Adviser to the PM on Industries and Production Haroon Akhtar Khan and Information Minister Attaullah Tarar on Saturday unveiled the policy's final draft at a press conference, saying it had been approved by the prime minister and would now be submitted to the cabinet for consideration. Akhtar said the policy had been finalised after extensive consultations to address structural weaknesses in the automotive sector. He said despite policies introduced over the past decade, Pakistan had failed to achieve the desired growth in auto exports, adding that the new framework placed particular emphasis on export-oriented production. The government has set a five-year target of increasing automotive exports from the existing $200 million to $6 billion. Manufacturers will be assigned export targets, and companies meeting them will receive a reward equivalent to five per cent of their export value in the first year. Those failing to achieve the prescribed targets will face penalties, he said, adding that localisation and development of domestic auto-parts manufacturing are among the policy's key priorities. Akhtar said the government did not want Pakistan's automotive industry to remain dependent on imported completely built-up units (CBUs) or limited to assembling completely knocked-down (CKD) kits without developing a strong domestic manufacturing base. The policy seeks to increase local content, strengthen domestic vendor industries and retain greater economic value within the country through manufacturing, technological advancement and job creation. Local auto-parts manufacturers will also be provided opportunities to expand their exports. To improve vehicle quality and passenger safety, the policy introduces 45 additional safety standards aimed at bringing locally manufactured vehicles closer to international benchmarks. Akhtar said inadequate safety features, defective brakes, tyre failures and non-functional seat belts had contributed to road accidents, making consumer protection an important consideration in the new framework. The safety concerns also extend to imported used vehicles. Under a consumer-protection measure, manufacturers will not be allowed to demand advance payments exceeding 20 per cent of a vehicle's price at the time of booking. The policy also provides for third-party audits to strengthen transparency and accountability in the automotive sector. The government has placed particular emphasis on electric vehicles to reduce dependence on imported petroleum products and protect the economy from fluctuations in international oil prices, which increase the import bill, put pressure on the current account and fuel inflation. Akhtar said the financing limit for electric vehicles had been increased from Rs2 million to Rs10 million to encourage their adoption. The government would also promote electric motorcycles as part of its broader transition towards cleaner transportation. He recalled that the prime minister had launched the National Electric Vehicle Policy last year, adding that its implementation results would also be shared. Under the proposed tax structure, electric vehicles will attract sales tax of one per cent, range-extended vehicles six per cent and plug-in hybrid vehicles nine per cent. Machinery imported for electric vehicle charging stations will be subject to one per cent sales tax, while customs duty on it will be zero. The government has also reduced import duties on equipment for charging infrastructure. Akhtar said additional duties would be imposed on large vehicles with commercial engines. He also highlighted the role of the National Tariff Policy in reducing production costs by making imported raw materials and intermediate goods more affordable. Lower input costs, he said, would enable domestic manufacturers to offer finished products at competitive prices in local and international markets. The adviser said the policy was expected to bring down vehicle prices gradually, benefiting consumers, particularly middle- and higher-income groups. However, the extent of any reduction would depend on implementation of the policy and the associated tax measures. Tarar clarified that the policy had yet to complete the formal approval process, as it would first be placed before the cabinet. Its final announcement and implementation would follow the required approvals including that of the International Monetary Fund (IMF). (WITH INPUT FROM APP)