Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum, has warned that abrupt tariff cuts on completely built-up vehicles (CBUs) could harm local manufacturing and discourage investment. He emphasized that while competition and affordable vehicles are crucial for consumers, Pakistan must focus on sustainable economic development through local assembly rather than increased imports. He stated that tariff reforms should aim to reduce inefficiencies and boost exports without threatening local factories.

Hussain pointed to a recent recovery in Pakistan’s automobile market, with passenger-car sales rising from 112,203 in FY2024-25 to 155,631 in FY2025-26. However, he stressed that the industry remains fragile, operating at less than 50% of its 500,000 annual capacity. Lowering tariffs without enhancing production could make imported vehicles more appealing.

He also emphasized the extensive network supporting the automobile industry, which contributes around 2.8% to GDP and employs approximately 215,000 people. The industry relies on a vendor base of about 2,200 firms, and dismantling these supply chains could take years to rebuild.

Hussain highlighted concerns over uncontrolled imports of used vehicles, which accounted for nearly one-fourth of passenger-vehicle sales in FY2024-25, resulting in significant losses for the local industry. He clarified that the business community is not seeking unrestricted protection for inefficient manufacturers; instead, he advocated for temporary support tied to measurable performance goals such as localization, exports, and technology transfer.

He urged that assemblers benefiting from tariff advantages should be transparent about localization levels and invest in local research and development. Consumers should also gain from industrial protection, with the government enforcing strict quality standards, warranty coverage, and price transparency.