Cars to Get Cheaper

Pakistan intends to link its automobile industry with global supply chains, rise exports and reduce tariffs under the proposed Auto Policy 2026-31.

Key points

• Importers Think Overseas Pakistanis Are Abusing Car Gift Scheme Oct 21, 2026 7: 01 pm.
• Breakdown of New Sales Tax Rates in Upcoming Auto Policy Oct 21, 2026 5: 21 pm.
• Pakistan's automobile sector recorded exports worth $190 million in fiscal year 2025-26, according to the draft.
• The draft proposes adopting 45 extra WP.29 vehicle regulations by 2029 and establishing a legal framework to ensure that safety standards are effectively implemented.
• The draft proposes reducing the overall weighted average tariff to below 6 percent by 2030.

For context, the draft outlines incentives for local auto parts manufacturing, export targets, tax reforms and stronger vehicle safety standards to improve the industry's competitiveness. Importers Think Overseas Pakistanis Are Abusing Car Gift Scheme.

Meanwhile, the administration seeks to growth local value addition, reduce dependence on imported components and produce vehicles more affordable.

Meanwhile, the proposed policy additionally seeks to improve vehicle quality and assist Pakistani manufacturers compete in regional and international markets.

Meanwhile, the draft proposes reducing the overall weighted average tariff to below 6 percent by 2030. It additionally calls for gradually eliminating Statutory Regulatory Orders applicable to the auto sector and removing automobile tariffs from the Fifth Schedule of the Customs Act, 1969. Auto Policy Targets Exports and Local Manufacturing.

Pakistan's automobile sector recorded exports worth $190 million in fiscal year 2025-26, according to the draft. The administration aims to expand overseas sales through export incentives and mandatory targets, shifting the industry's focus from tariff protection toward performance-based backing.

Notably, the draft states that more than 2, 200 auto parts manufacturers operate in Pakistan. The automobile sector contributes approximately 4.5 percent to large-scale manufacturing and provides direct and indirect employment to around 2.5 million individuals. It additionally generates more than Rs. 784 billion in annual taxes.

To encourage cleaner vehicles, the proposed policy includes tax incentives for new energy vehicles, including electric vehicles, through a lower general sales tax rate and feasible exemptions from other duties and taxes.

It additionally proposes an Auto Development Levy on conventional vehicles with larger engine capacities.

Notably, the administration seeks to create smaller vehicles more affordable while protecting consumers through improved quality and safety requirements.

Meanwhile, the draft identifies low domestic value addition as a major industry challenge and calls for rose local production of auto parts to reduce reliance on imported components. Administration Aims Tougher Vehicle Safety Rules.

For context, the draft proposes adopting 45 extra WP.29 vehicle regulations by 2029 and establishing a legal framework to ensure that safety standards are effectively implemented.

It additionally calls for an external audit of all import permits issued by the Engineering Development Board (EDB) and the full digitalization of the board's internal administrative systems to improve transparency and regulatory efficiency. Breakdown of New Sales Tax Rates in Upcoming Auto Policy.

In practice, a steering committee headed by the minister for industries and production would oversee implementation of the policy. The proposals remain subject to the government's final decisions.

In practice, the proposed framework seeks to growth exports, improve productivity, reduce vehicle costs and strengthen Pakistan's position in international markets by combining tariff reforms with local manufacturing and performance-based incentives. Stay Connected with ProPakistani.

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Taken together, the developments around cars to Get Cheaper point to a situation that is still moving, and the coming days should bring more clarity.