ACCORDING to latest reports, the crisis in the auto industry of the country has complicated further with annual production coming down to about sixty per cent. Two car manufacturers/assemblers have started working in one shift as against three previously, laying down about two thousand of their employees in the face of unprecedented slump. The Automobile industry has been a dynamic and growing industry in Pakistan for a long time, contributing significantly to the GDP growth and providing direct or indirect employment opportunities to millions of people across the country. Reasonable economic growth, somewhat stable unemployment rate and rise in local and foreign investment resulted in increase in the purchasing power of the people and therefore, there was growing demand for cars, motorbikes and commercial vehicles. The industry flourished and there was a beeline of companies from around the globe expressing readiness and making known their plans to invest in automobile manufacturing and assembly in Pakistan. However, the economic slump being witnessed during the last two years has, like other sectors, badly affected the auto industry as well. It is also worth mentioning that the previous Government provided lucrative incentives including financial benefits for new initiativesinthe auto sector butthese are alsothreatenedinthe face of nosedive in sale of vehicles. There is no doubt that the situation has much to do with the policies of the Government especially devaluation of rupee and imposition of taxes and duties but companies also have to blame themselves for the ongoing crisis. They have raised prices of all models unjustifiably and in some cases the prices are almost double as compared to previous ones. The fall in sales is also attributed to the higher interest rate, which has rendered bank financing schemes unattractive for majority of prospective buyers. Such a sorry state of affairs cannot be allowed to continue especially when the Prime Minister is repeatedly asserting to focus on industrialization. The Government should review its policies and provide incentives to the crisisridden auto industry but at the same time the regulatory mechanism should be made effective to ensure that there is no undue hike in prices for the sake of mere profiteering, companies should go for total indigenization and quality of the vehicles and facilities offered should be at par with models elsewhere in the world.