KARACHI: Pakistan’s auto industry has warned that more international firms could exit if the government continues with “regressive and exploitative” policies, citing Yamaha’s recent pullout as a case in point.

Director General of the Pakistan Automotive Manufacturers Association (PAMA), Abdul Waheed Khan, said foreign direct investment remained negligible and several global companies — including Shell, Uber, Careem, Microsoft and Telenor — had already left Pakistan.

Explaining Yamaha’s exit, he said automakers are required to meet mandatory export targets to qualify for imports of raw materials and components. “This law is detached from ground realities and has proved the last nail in the coffin for an already struggling auto sector,” he said.

Yamaha, which re-entered Pakistan in 2015 with a $100 million investment, exited barely a decade later despite achievements in localisation, technology transfer and employment generation. It was the only company after Honda to localise engine production in Pakistan.

Mr Khan also criticised the recently promulgated Motor Vehicle Development Act 2025, which criminalises routine business matters. “Treating civil issues under criminal law, with the possibility of arrests and long sentences, is catastrophic for foreign investors,” he said.

IMC outlook

Separately, Indus Motor Company (IMC) told analysts that floods had slowed sales, with the impact likely to emerge over the next few months. Without the disruption, the total car market, including used imports, could have crossed 300,000 units in FY26, compared to 223,799 units in FY25.

Published in Dawn, September 19th, 2025