ISLAMABAD – Auto sector saw a revival in Pakistan after year of meager sales, but prices of locally made cars are still sky-high due top currency devaluation and surge in production.
Amid soaring car prices, there is sigh of relief as upcoming federal budget may bring relief, as government is considering slashing taxes on imported vehicles — making them more affordable for consumers across the country of 242 million.
According to official sources, Federal Board of Revenue (FBR) proposed reduction of 5% to 30% in customs duty on brand-new imported cars. This potential tax relief would apply to a wide range of vehicles, from small 850cc cars to larger models up to 1801cc. Currently, imported cars are taxed heavily, with duties ranging between 50 and 100percent.
This positive development comes as part of discussions with International Monetary Fund (IMF), which recommended that Pakistan open up commercial imports and reduce taxes on imported cars to make the market more competitive.
Even more exciting, the government is also reviewing its policy on used cars. There’s serious consideration of allowing the import of used vehicles up to 5 years old — a major shift from the current limitations. And in the long run, imports of cars up to 10 years old could also be allowed, giving buyers a broader range of affordable options.
But that’s not all — the government is also preparing to launch a 5-year Electric Vehicle (EV) policy aimed at promoting eco-friendly transport. This could mean more choices and better prices for e-vehicles in the near future as well.
The federal budget will be presented in Parliament on June 2, and all eyes are now on the final decisions that could make imported cars more accessible than ever for Pakistani consumers.
Car Sales in Pakistan 2025
Pakistan’s automotive sector saw strong recovery in this fiscal year, with car sales rising 46pc year-on-year to around 1lac units in first nine months amid easing inflation, lower interest rates, better financing, and the launch of new car models.
Suzuki led market with 40pc growth, Toyota posted strong 58% increase, driven by Corolla and Yaris sales. Sazgar Engineering recorded the highest growth at 153%. Honda however faced declines but still posted a 29pc annual rise.
Top-Selling Cars in Pakistan 2025; Check Latest Market Trends
