KARACHI, PAKISTAN: The Pakistan Automotive Manufacturers Association (PAMA) has raised serious concerns about the growing instability in the auto sector, warning that more international companies may follow Yamaha’s recent exit if government policies are not urgently reviewed.
Abdul Waheed Khan, Director General of PAMA, cautioned that foreign direct investment in Pakistan remains “negligible” and stressed that the departures of global players like Shell, Uber, Careem, Microsoft, and Telenor are alarming signals for the business climate. He described the current policy framework as “regressive and exploitative,” highlighting how it undermines localisation, technology transfer, and job creation.
Particular criticism was directed at the recently passed Motor Vehicle Development Act 2025, which sets unrealistic export conditions for manufacturers to qualify for raw material and component imports. Khan argued that these targets ignore ground realities and add to the struggles of an industry already burdened with high costs and supply chain disruptions. Even more troubling, he added, are provisions of the law that criminalise normal business practices, threatening investors with heavy fines and even jail time.
PAMA pointed to Yamaha’s journey as a stark example — the company invested $100 million upon its return to Pakistan in 2015, localised engine production, transferred technology, and created jobs. Yet despite these efforts, Yamaha has now exited the market, exposing systemic policy flaws and governance challenges.
Meanwhile, Indus Motor Company (IMC) revealed that recent floods have severely disrupted operations, with sales expected to decline further in the coming months. Without these setbacks, IMC projected that the total auto market could have surpassed 300,000 units in FY2025-26, compared to 223,799 units last year.
Industry experts believe that unless swift corrective measures are introduced — including policy consistency, investor-friendly regulations, and practical export targets — Pakistan risks deeper losses in investment and a weakening of its already fragile auto industry.
This story has been reported by PakTribune. All rights reserved.