The Competition Commission of Pakistan (CCP) has revealed that despite years of policy interventions, the country’s passenger car market remains concentrated among a small number of players, keeping prices high and limiting consumer choice. The regulator’s comprehensive study, “The Road to Fair Competition – A Study of Pakistan’s Automobile Industry,” highlights structural and regulatory barriers that continue to stifle competition and hinder sector growth.
The report notes that high entry barriers, capital-intensive requirements, and regulatory complexities have restricted new entrants, while prolonged tariff protections and localization measures have not consistently delivered competitive pricing or export-led growth. While past protectionist policies helped establish domestic manufacturing, their long-term impact on affordability and market diversification has been limited.
The CCP study also points to fragmentation in the regulatory framework, with overlapping mandates and inconsistent policies discouraging investment and innovation. Previous auto policies aimed at increasing localization, attracting new players, and promoting exports were often undermined by structural rigidities, policy reversals, and weak implementation.
To address affordability and stimulate demand, the Commission recommends expanding access to auto financing by reviewing restrictive lending limits and introducing targeted schemes for first-time buyers, coordinated with financial regulators.
The study emphasizes the urgent need for a coordinated transition to electric vehicles, highlighting barriers such as limited charging infrastructure, insufficient domestic production capacity, and reliance on fossil fuel-based electricity. The CCP stresses that predictable policies and strategic infrastructure investment are essential to attract long-term private investment in Pakistan’s EV ecosystem.
The report also calls for a comprehensive vehicle scrappage and phase-out policy to remove obsolete and high-emission vehicles, improve road safety, protect the environment, and generate market demand for newer, more efficient models.
In addition, the CCP advocates for strengthening domestic vendor development through transparent and non-discriminatory localization policies, rationalizing tariff protections, removing regulatory asymmetries, and adopting stable, pro-competition policies. According to the Commission, a more competitive automobile sector could deliver lower prices, better quality, greater consumer choice, and enhanced export potential.
The CCP hopes its findings will guide policymakers, regulators, and industry stakeholders in building a modern, competitive, and globally integrated auto industry. The full study is available on the CCP website for public feedback and comments.
