KARACHI: The Pakistan Japan Business Forum (PJBF) has raised concerns over the reported consideration of cuts in import duties on completely built-up (CBU) vehicles and reductions in tariffs on locally manufactured auto parts, warning that such changes could disrupt Pakistan’s automotive manufacturing base.
In a statement on Wednesday, the forum said Japanese and Pakistani firms have made long-term investments over four decades in the sector, contributing to production facilities, vendor development, skills training, employment and tax revenues. It said policy stability has been central to sustaining these investments.
The PJBF cautioned that a sharp reduction in CBU duties could increase competitive pressure on locally assembled vehicles, while lower tariffs on parts may weaken incentives for localisation and impact domestic suppliers across the value chain.
It warned that reduced viability of local manufacturing could lead to a scaling back of investment, with longer-term losses in technical capacity and skilled labour that would be costly to rebuild.
The forum also said a shift towards higher reliance on imports could increase pressure on foreign exchange reserves, adding strain to the external account.The PJBF said Pakistan’s long-term industrial strategy should prioritise domestic manufacturing, technology transfer and local value addition, supported by a stable and predictable policy framework.
It urged the government to maintain the existing duty structure on finished vehicles and ensure any future policy changes are developed in consultation with industry stakeholders, taking into account impacts on investment, employment and localisation.
