New Auto Policy May Lower Car Prices in Pakistan, Focus on Local Manufacturing

Islamabad: The government is preparing to introduce a new auto policy aimed at reducing car prices and strengthening the domestic automotive industry, offering potential relief to consumers affected by rising vehicle costs.
The development came during a meeting chaired by Haroon Akhtar Khan, Special Assistant to the Prime Minister, with a delegation from the auto parts industry. Discussions focused on the upcoming policy framework and measures to promote local manufacturing.
Haroon Akhtar Khan stated that the central objective of the new auto policy is to boost the local production of auto parts, which is expected to significantly lower vehicle prices while revitalizing the national industry.
He also advised manufacturers to shift towards electric vehicle (EV) technologies in line with global trends, enabling them to remain competitive in international markets.
The Engineering Development Board has been directed to collaborate with all stakeholders to formulate a comprehensive and effective policy framework.
Officials emphasized that the upcoming policy will be multi-dimensional, focusing on the overall growth of Pakistan’s auto sector. Reducing car prices has been identified as a key priority.
Proposals are also under consideration to offer special incentives for the production of EV components. Additionally, the government is reviewing potential changes in taxes and duties to make vehicles more affordable, particularly for the middle class.
According to officials, the policy is expected to be introduced on July 1, while small electric vehicles priced below Rs1 million may be launched later this year.
Representatives of auto parts manufacturers highlighted ongoing challenges despite an increase in the number of vehicle assemblers. They pointed out disparities in duty structures, noting that new entrants import parts at a 25% duty, while existing manufacturers rely on CKD kits with a 15% duty.
They urged the government to prioritize small and medium-sized auto parts manufacturers in the new policy and to focus on genuine manufacturing within Pakistan rather than mere vehicle assembly.