New auto policy: which cars could get cheaper in Pakistan, and should you wait before buying?
Draft estimates say petrol cars could fall 8-10% and plug-in hybrids over 20%. The policy also targets on-money and late deliveries.
If you are planning to buy a car, Pakistan’s draft Auto Policy 2026-31 is worth knowing about. Prime Minister Shehbaz Sharif reportedly approved the draft in principle on October 20, according to Daily Pakistan, and industry analysts have started working out what it could do to prices.
How much cheaper?
These are preliminary industry estimates reported by ProPakistani, citing Topline Securities and industry estimates, not official price cuts:
| Type of car | Expected change |
|---|---|
| Petrol cars | about 8-10% cheaper |
| Hybrids (HEV) | about 9% cheaper |
| Plug-in hybrids (PHEV) | more than 20% cheaper |
| Electric cars under $15,000 import value | about 22% cheaper |
| Pricier electric cars | about 8% cheaper |
| Range-extended EVs | about 3% more expensive |
Daily Pakistan estimates the Suzuki Alto could drop to around Rs2.8 million, working from an assumed current price of Rs3.2 million. Pak Suzuki has not confirmed this.
What changes in taxes
According to the draft, as reported by Daily Pakistan and ProPakistani:
- Sales tax: 1% on battery EVs, 6% on range-extended EVs, 9% on plug-in hybrids, and 18% on regular hybrids, petrol and diesel cars.
- New development levy: 0% on cars up to 1,000cc, 2% on 1,001-2,000cc and 10% above 2,000cc. So small cars like the Alto escape it, but big SUVs pay more.
- Customs duty on petrol and diesel cars cut gradually to 15% by 2031.
- Duty on imported parts (CKD) cut from 25% to 15% by FY2031.
Good news on on-money and delays
The draft also targets two things every Pakistani car buyer hates, according to the Lahore Times and Daily Pakistan:
- Price locked at booking, changing only if government taxes change.
- Advance payment capped at 20% of the price.
- Compensation if the company doesn’t deliver within 30 days.
- Cars registered in the buyer’s name before delivery, plus tighter checks on dealers charging on-money.
Not final yet
The policy still needs IMF scrutiny, cabinet approval and legislation. The IMF has asked for more data. Many changes are phased in up to 2031, so the full savings won’t arrive at once, and companies must decide whether to pass them on.
Should you wait?
ProPakistani notes that buyers are already holding back, which worries carmakers sitting on stock. If you need a car now, buy what makes sense for you. But if you are flexible, especially if you are eyeing a small car, hybrid or EV, it may be worth waiting until the final policy is announced.
Sources
This story was researched and drafted with AI assistance, then checked and edited by our editor before publishing.
