PJBF warns against sharp cuts in import duties on CBU vehicles, auto parts

ISLAMABAD – The Pakistan Japan Business Forum (PJBF) has expressed serious concern over the reported consideration of a significant reduction in import duties on Completely Built-Up (CBU) vehicles, as well as substantial reductions in duties on localized auto parts. PJBF has cautioned that any major change in the existing duty structure for imported vehicles and localized parts could have serious and irreversible consequences for Pakistan’s local automobile manufacturing sector. PJBF stated that, over the last four decades, Japanese and Pakistani companies have made substantial long-term investments in Pakistan’s automobile industry. These investments have contributed to the establishment of manufacturing facilities, development of local vendor networks, transfer of technical know-how, training of skilled manpower, employment generation, and significant contribution to national tax revenues. The continuity of a balanced and predictable policy framework has played a central role in enabling these long-term industrial commitments. The Forum emphasized that a sudden and sharp reduction in CBU duties would place locally manufactured vehicles under severe pressure from imported new and used vehicles. Similarly, any major reduction in duties on localized auto parts would weaken the business case for local parts manufacturing and discourage further localization. Such policy changes could undermine the commercial viability of domestic manufacturing operations and adversely affect the wider supply chain, including hundreds of local parts manufacturers, dealers, service providers, and associated businesses. PJBF further warned that if local manufacturing operations become unsustainable, ‘investments made by Japanese and Pakistani companies in the automobile sector could be scaled down or even rolled back. Once manufacturing capacity, vendor infrastructure, technical capability, and skilled human resources are lost, rebuilding them in the future would be extr