Pakistan’s proposed Auto Policy 2026-31 could bring significant price reductions across several vehicle categories, with some cars potentially becoming more than 20% cheaper while others may see price increases.
Preliminary industry estimates suggest automakers could reduce conventional petrol car prices by approximately 8% to 10% and hybrid electric vehicle (HEV) prices by around 9%. Plug-in hybrid electric vehicles (PHEVs) could see even larger reductions, exceeding 20%.
Battery electric vehicles (BEVs) with import values below $15,000 could become approximately 22% cheaper, while higher-priced BEVs may see reductions of around 8%.
However, range-extended electric vehicles (REEVs) could become approximately 3% more expensive under the proposed tax structure. According to Topline Securities, the latest draft retains the 1% general sales tax (GST) on BEVs but proposes 9% for PHEVs and 6% for REEVs.
The previous draft proposed a uniform 1% GST on all new energy vehicles (NEVs), while the earlier policy imposed tax rates ranging from 8.5% to 12.75% on PHEVs.
The government also plans to reduce tariffs on localized completely knocked-down (CKD) parts from 25% to 15% by fiscal year 2031. Topline Securities warned that the tariff reduction could hurt local auto-parts manufacturers. However, intense competition could encourage automakers to pass the savings on to consumers.
Meanwhile, expectations of lower prices could prompt buyers to postpone purchases, potentially slowing vehicle sales and creating uncertainty for automakers holding existing inventory.
The post Here’s How Much Vehicle Prices Are Expected to Drop Under New Auto Policy appeared first on ProPakistani.