Pakistan Approves New Auto Policy: Car Prices to Fall, EV Financing Raised

The Pakistani government has approved a new auto policy that is expected to gradually reduce car prices, according to Haroon Akhtar, Adviser to the Prime Minister on Industries and Production. The policy, finalized after extensive consultations, introduces measures to protect buyers and stimulate the auto sector.

A key feature of the policy is a cap on advance payments: carmakers will not be allowed to collect more than 20% of a vehicle's price as an advance from buyers. This move is intended to safeguard consumers from excessive upfront costs and bring transparency to vehicle bookings.

The policy sets an ambitious target to increase auto sector exports from the current $200 million to $6 billion. Manufacturers that fail to meet their export targets will face penalties. Akhtar noted that previous policies over the past decade failed to boost exports, but this time the focus is squarely on export-led growth, with special priority given to vehicle exports.

To improve vehicle quality to international standards, 45 additional standards have been incorporated into the policy. Akhtar stated that this would place Pakistani-made cars among the best in terms of quality and safety.

The government is also placing significant emphasis on electric vehicles (EVs), recognizing their growing importance in light of recent regional tensions. To encourage EV adoption, the financing limit for electric vehicles has been raised to Rs. 10 million, and import duties on EV charging stations have been reduced.

The new policy aims to achieve better vehicle quality, lower prices, wider EV adoption, and higher exports. Akhtar emphasized that large industries remain a government priority, and the auto industry plays a crucial role in large-scale manufacturing.