IN 1953, when National Motors assembled Pakistan’s first Vauxhall car and Bedford truck in Karachi, it was a quiet, but consequential moment — the seed of what should have grown into a self-sufficient industrial ecosystem. More than seven decades later, that seed has produced foliage, but no roots.

The industry today employs 3.5 million people, contributes three per cent to the national gross domestic product (GDP), and produces roughly 200,000 vehicles and 1.8 million motorcycles annually. The figures invite pride, but they should, instead, invite scrutiny because not one of the industry’s so-called manufacturers can produce a complete vehicle, or even a complete engine.

The word ‘manufacturer’ is, in this context, a generous fiction because what the stakeholders do is to import completely knocked down (CKD) kits — pre-fabricated engines, body shells and component sets. They just assemble them in local plants, and sell the result at a significant premium to consumers.

Local content is largely limited to tyres, glass, batteries and seat upholstery. The engine, the soul of any vehicle, arrives in a crate from abroad. It always has. This was not supposed to be the arrangement. In the 1980s, the government introduced the Deletion Programme, a formal policy requiring assemblers to progressively manufacture vehicles locally. Not a single company has honoured the commitment. The programme exists on paper, but the engines keep arriving in crates.

A single car requires between 20,000 and 25,000 parts. Each of these parts can be produced in a small dedicated factory. But without strong political will and sincere policy enforcement, this dream of local manufacturing will remain just that; a dream. The economic cost is not an abstract. The industry collects advance bookings — often the full vehicle price paid upfront — and then deposits that rupee sum with the State Bank of Pakistan (SBP), which converts it into foreign exchange and remits it abroad to pay for CKD kits.

Pakistan requires more or less 300,000 vehicles every single year. Local assemblers supply 200,000. The remaining 100,000 are provided through a standing facility that allows overseas Pakistanis to send vehicles home. This workaround, introduced as a temporary measure, has persisted for four decades. It is not a solution. It is an admission of failure dressed up as a policy.

As the government prepares to announce the Auto Policy 2026-31, the path forward is not obscure. The Deletion Programme must be enforced with binding timelines, verified milestones, and real consequences for non-compliance. Assemblers who have operated profitably behind protective tariff walls for decades owe a reciprocal obligation: to manufacture, not merely assemble.

The objective should not be to punish the industry, but to transform it. Every rupee saved on CKD imports is a factory that could be built here, a job that could be created here, a dollar that could be kept here. The technology exists. The market exists. The workforce exists.

What has been missing, for more than 70 years, is the resolve to insist that the automobile industry should finally become what it has long claimed to be — not an assembly line, but an industry.

Nabeel Badr
Islamabad

Published in Dawn, May 7th, 2026