Pakistan Drafts Law to Rein in Auto Industry
The federal government has introduced a new bill to improve vehicle safety standards across Pakistan, focusing on two-, three-, and four-wheelers.
Officials from the Engineering Development Board (EDB) confirmed that the “Motor Vehicles Industry Development Bill, 2025” has been cleared by the Cabinet Committee on Disposal of Legislative Cases and later approved by the Federal Cabinet.
The bill is expected to be presented before the National Assembly this week. It introduces penalties for automobile companies that fail to address manufacturing faults or issue recalls within a year of warranty.
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Secretary for Industries and Production, Saif Anjum, said the law proposes fines up to Rs2 million or imprisonment of up to three years for manufacturers failing to comply. The identities of violating companies would also be made public.
He noted that previous laws offered limited control over powerful automakers, including Japanese firms, despite the auto industry operating since 1983. The new law intends to change that.
Pakistan’s automotive industry is valued at over Rs600 billion, producing nearly 1.8 million units yearly, with two- and three-wheelers accounting for the bulk.
The bill includes provisions for mandatory recalls, minimum safety and environmental standards, certification requirements, after-sales service obligations, and protection of advance-paying consumers from unfair pricing practices.
Under the proposed framework, only licensed and incorporated entities with approved capital thresholds will be allowed to manufacture or import vehicles. The EDB will serve as the primary regulator, while provinces will support enforcement.
