Auto companies fail to get permanent manufacturing license in Pakistan

ISLAMABAD: The three auto companies faced manufacturing license suspension for the second time as the companies failed to meet the conditions related to the export and localization of vehicles in Pakistan, ARY News reported on Monday, citing sources.

Despite efforts by major companies to submit comprehensive business plans, the Ministry of Industries and Production has not yet reached a verdict on these proposals.

Sources within the Ministry of Industry and Production in Pakistan stated that the licenses of these companies were initially extended till December 31, 2023.

However, the licenses of car manufacturing companies were again suspended as they failed to meet the export-related terms as well as the production of vehicles at the local level.

Sources revealed that the car manufacturer companies are not able to meet 2 percent export-related conditions imposed by authorities, while the manufacturing companies have failed to meet requirements related to the production of vehicle components and spare parts at the local level.

Last year in October, the manufacturing licences of three auto companies have been suspended in Pakistan over failure to achieve the export targets, citing sources.

The Ministry of Industries and Production suspended manufacturing licences of three car and auto part makers over different genres of violations.

Sources told ARY News that the said car manufacturers allegedly violated Pakistan’s auto policy and failed to achieve the export targets. The action was taken over the failure to meet conditions for localisation of the auto manufacturing by the auto companies.

The auto firms did not increase the local production of the cars, whereas, they also failed to meet 2% export targets, said sources, adding that the car makers are bound to produce vehicles and spare parts locally.

Sources within the ministry said that the government will not extend the licences of the companies.

The development came at a time when three major auto manufacturers in Pakistan announced a temporary shutdown of production plants due to an ongoing shortage of essential raw materials this month.