The federal government plans to penalize car makers who miss export targets under Pakistan's new 5-year auto policy. The draft sets Mandatory Export Targets (METS) for vehicle makers and auto parts firms, with real penalties for falling short. It also offers export rebates and other support to help the industry grow.
What the Export Targets Actually Are
Car makers will need to export 4% of their production in 2026-27. That target rises to 20% by 2030-31. Auto parts makers face a smaller jump, from 5% up to 15%.
The goal is to link Pakistan's auto parts industry with global supply chains and reduce the country's reliance on the domestic market alone.
What Happens If Companies Miss the Target
Companies that fail to hit their export numbers could face customs penalties. In some cases, their manufacturing licenses could even be cancelled. Export targets may become a condition tied directly to the license itself.
This penalty structure worries the Pakistan Automotive Manufacturers Association (PAMA). On October 1, 2026, PAMA asked the government to share the draft policy with the industry before sending it to the Prime Minister. PAMA's Director General, Razi ur Rahman, said the industry would prefer incentives and a stable policy over punishment.
Support for Exporters Under the New Policy
The policy is not only about penalties. It also offers help for companies that do hit their targets.
- A Duty and Tax Remission for Exporters (DLTL) scheme will give a 5% baseline rebate, plus another 10% on export growth above the baseline.
- An Export Facilitation Council will oversee targets, market development, and trade promotion.
- A Vendor Upgradation and Technology Transfer Programme will help local parts makers upgrade their equipment and skills.
- A proposed Pakistan Auto Testing Institute would handle vehicle testing needed for exports.
