New Auto Policy Set to Lower Car Prices
The upcoming Auto Industry Policy 31-2026 is expected to directly impact vehicle prices in Pakistan, offering relief to consumers burdened by high costs for decades.
Under the policy, the government plans to slash tariffs on fully assembled cars to 15%, remove outdated preferential schemes, and allow commercial imports of used cars.
These measures are designed to reduce production and import costs, enabling manufacturers and dealers to offer lower prices to buyers.
Local assemblers have long argued that high duties on CKD kits and parts inflate vehicle prices, making cars unaffordable for average Pakistanis.
By cutting taxes and duties, the new policy aims to pass these savings to consumers, shrinking the price gap between new models and imported alternatives.
Read More: Punjab Introduces Revised Fee for Emission Testing
Used car imports, previously restricted in the country, will now be officially permitted, increasing market competition.
Policymakers believe this move will force local manufacturers to price cars more competitively while offering modern, safer options to buyers.
Some Japanese automakers and parts suppliers oppose tariff cuts, favoring rates up to 35%, but authorities argue high protectionism inflates car prices unnecessarily.
Officials maintain that keeping tariffs high restricts consumer options, raises vehicle costs, and prolongs dependence on outdated cars despite industry resistance.
New auto entrants with hybrid and plug-in hybrid models meeting global safety standards are likely to reduce prices by challenging established manufacturers.
