The automotive sector in Pakistan has voiced strong concerns over the proposed Motor Vehicles Industry Development Act 2025. Instead of encouraging growth and stability, industry leaders warn the law could hinder investment, raise costs, and criminalise normal business practices.
Industry Raises Alarm Over Draft Law
According to industry representatives, the draft legislation was prepared without proper consultation with stakeholders. They argue it gives sweeping and unchecked powers to bureaucratic bodies, especially the Engineering Development Board (EDB). Vague provisions, combined with punitive enforcement, could discourage local and foreign investment at a time when economic stability is critical.
One of the most controversial aspects is the classification of routine business matters such as recalls and warranty disputes as cognisable offences. These would be handled by the Federal Investigation Agency (FIA). Automakers believe this approach equates manufacturers with criminals, creating an environment of mistrust.
Concerns Over FIA and EDB Powers
Stakeholders highlight that Pakistan already has multiple regulatory frameworks. These include the Auto Policy 2021–26, competition law, consumer protection laws, SRO 656, and the Import and Export Control Act. Local assemblers also comply with 17 international UNECE safety standards. Furthermore, warranties, after-sales services, and recalls are already standard practice in the industry.
Despite this, the draft law introduces additional powers for the EDB. It authorises the board to manage recalls, issue type approvals, regulate repairs, and conduct surveillance. Alarmingly, the EDB would also be allowed to enter premises without warrants. Industry experts argue that, unlike statutory regulators such as SECP or CCP, the EDB lacks legislative backing, accountability, and technical resources. As a result, many of these powers are seen as impractical and open to misuse.
Risks for Consumers and Businesses
For consumers, the proposed law could unintentionally create negative consequences. Automakers caution that additional compliance costs and bureaucratic delays will increase vehicle prices. Broad terms such as “significant risk” and “unfair contract terms” also leave room for arbitrary interpretation.
Industry representatives stress they are not against regulation. Instead, they are demanding clear, targeted guidelines that strengthen consumer protection without burdening documented businesses. They call for meaningful consultation with manufacturers, provincial governments, and consumer groups. This, they argue, is the only way to close regulatory gaps while still promoting industry growth.
Key Objections to Specific Provisions
The industry has raised objections to several sections of the draft law:
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Section 5: Manufacturers should not be held liable for accidents caused by reckless drivers or those ignoring safety precautions.
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Section 9: The requirement of a conformity certificate duplicates existing practices since assemblers already issue COCs. Any modifications after purchase, such as tyre changes or body alterations, should not make assemblers liable.
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Section 15: The discretionary authority given to undefined EDB staff members to enforce the Act is legally questionable and could lead to misuse.
PAMA and other stakeholders argue that the EDB does not have the capacity to regulate thousands of workshops across the country. Imposing such responsibilities would only create inefficiency and confusion.
Industry Calls for Review and Consultation
The automotive sector is urging the government to delay the implementation of the draft law. Industry leaders recommend careful scrutiny of its administrative aspects and removal of clauses that criminalise legitimate operations. They stress that stronger enforcement of existing frameworks, combined with industry consultation, is a more effective approach.
By addressing these concerns, Pakistan can achieve a balanced regulatory environment that protects consumers, supports manufacturers, and encourages long-term investment in the auto sector.
