It’s a common claim that cars in Pakistan are overpriced compared to the rest of the world. However, tells a different story.
According to Amir Allawala, a senior PAMA member, locally assembled cars in Pakistan are actually cheaper than comparable models in Thailand and Indonesia, though slightly more expensive than in India, where large-scale production and policy stability have kept costs down.
Regional Price Comparison
(Source: Amir Allawala, senior representative of PAMA)
| Model / Variant | Country | Factory Price (incl. VAT) | VAT Rate | Price Excl. Tax (Local Currency) | Exchange Rate | Net Price (USD) |
| Toyota Corolla 1.8 CVT (AT) | Pakistan | PKR 7,029,000 | 25 % | PKR 5,271,750 | PKR 285 = 1 USD | $18,497 |
| Indonesia | IDR 583,300,000 | 12 % | IDR 513,304,000 | IDR 16,400 = 1 USD | $31,299 | |
| Thailand | THB 979,000 | 7 % | THB 910,470 | THB 32.5 = 1 USD | $28,014 | |
| Toyota Corolla / Vios 1.5–1.6 CVT (AT) | Pakistan | PKR 6,699,000 | 25 % | PKR 5,024,250 | PKR 285 = 1 USD | $17,629 |
| Indonesia | IDR 374,800,000 | 12 % | IDR 329,824,000 | IDR 16,400 = 1 USD | $20,111 | |
| Thailand | THB 894,000 | 7 % | THB 831,420 | THB 32.5 = 1 USD | $25,582 | |
| Toyota Corolla Cross 1.8 Hybrid (AT) | Pakistan | PKR 8,535,000 | 18 % | PKR 6,998,700 | PKR 285 = 1 USD | $24,557 |
| Indonesia | IDR 603,800,000 | 12 % | IDR 531,344,000 | IDR 16,400 = 1 USD | $32,399 | |
| Thailand | THB 1,254,000 | 7 % | THB 1,166,220 | THB 32.5 = 1 USD | $35,884 | |
| Toyota Yaris 1.3 GLi / Raize 1.2 G (AT) | Pakistan | PKR 4,835,000 | 18 % | PKR 3,964,700 | PKR 285 = 1 USD | $13,911 |
| Indonesia | IDR 242,200,000 | 12 % | IDR 213,136,000 | IDR 16,400 = 1 USD | $12,996 | |
| Thailand | THB 699,000 | 7 % | THB 650,070 | THB 32.5 = 1 USD | $20,002 | |
| Honda City 1.5 L (AT) | Pakistan | PKR 6,069,000 | 25 % | PKR 4,551,750 | PKR 285 = 1 USD | $15,971 |
| Indonesia | IDR 402,000,000 | 12 % | IDR 353,760,000 | IDR 16,400 = 1 USD | $21,571 | |
| India | INR 1,664,900 | 28 % | INR 1,198,728 | INR 87 = 1 USD | $13,778 | |
| 1.2 L Hatchback (Swift/Brio/Sirion) | Pakistan | PKR 4,605,600 | 18 % | PKR 3,776,592 | PKR 285 = 1 USD | $13,251 |
| Indonesia (Brio) | IDR 202,500,000 | 12 % | IDR 178,200,000 | IDR 16,400 = 1 USD | $10,866 | |
| Indonesia (Sirion) | IDR 233,850,000 | 12 % | IDR 205,788,000 | IDR 16,400 = 1 USD | $12,548 | |
| Small Entry Hatchback (Suzuki Alto) | Pakistan | PKR 3,166,480 | 18 % | PKR 2,596,514 | PKR 285 = 1 USD | $9,111 |
| Indonesia (Ayla) | IDR 157,300,000 | 12 % | IDR 138,424,000 | IDR 16,400 = 1 USD | $8,440 | |
| India (Hyundai i20 N Line)** | INR 1,118,800 | 28 % | INR 805,536 | INR 87 = 1 USD | $9,259 | |
| India (Suzuki Alto)** | INR 686,865 | 28 % | INR 494,543 | INR 87 = 1 USD | $5,684 |
When converted to U.S. dollars and adjusted for taxes, Pakistan’s locally assembled vehicles, particularly those from Toyota and Honda, remain competitive in the region. In many cases, they’re thousands of dollars cheaper than similar variants sold in Thailand and Indonesia.
“India Is a Unique Case,” Says Allawala
Allawala stated that India’s lower car prices are due to its massive production scale and long-term policy consistency, which have encouraged global automakers to invest locally.
“India is a unique case where six million cars are produced, leading to economies of scale,” he said. “They have their own raw material industry, and every auto part maker in the world has a factory in India.”
He added that India’s market is highly protected, with over 100% customs duties on car imports, and long-standing government support in areas such as consumer financing, testing centers, and R&D infrastructure.
“Suzuki alone produces nearly two million vehicles annually in India,” he added. “The 30 years of policy stability in India stimulate such investment by global giants.”
Local Assembly Still Heavily Dependent on Imports
Despite competitive ex-factory prices, Pakistan’s auto sector remains largely import-reliant.
According to the State Bank of Pakistan, the country imported $1.55 billion worth of automotive parts in FY 2024–25 to assemble vehicles locally, excluding Completely Built Units (CBUs).
Most of these imports are Completely Knocked Down (CKD) kits, meaning semi-finished components are shipped in and assembled domestically. This heavy dependence exposes the sector to exchange rate volatility and import restrictions, which directly influence car prices.
IMF Push to Ease Used-Car Imports Sparks Industry Concerns
Allawala also revealed that the International Monetary Fund (IMF) is urging Pakistan to open its market to used car imports by relaxing rules under the Gift, Personal Baggage, and Transfer of Residence schemes.
The IMF argues that allowing more imports would increase competition and reduce prices, but Allawala disagrees.
“Our cars are already cheaper than those in Indonesia and Thailand before taxes,” he said. “It’s not manufacturing costs that make cars expensive, it’s excessive taxation.”
He warned that a surge in used imports would undermine local assemblers and put over 1.8 million jobs at risk.
Countries like India, Indonesia, and Thailand impose import duties of 80–100% to protect their local industries, whereas Pakistan faces pressure to do the opposite.
“If the IMF’s proposal is implemented,” Allawala cautioned, “it could derail localization, deter new investments, and shrink industrial employment. Our cars are competitive, it’s the tax system that isn’t.”
The Bigger Picture
Industry experts like Allawal note that the notion of “overpriced” cars in Pakistan overlooks structural realities. Stripped of taxes and duties, local prices are competitive with, and sometimes lower than, comparable models in Southeast Asia.
However, the industry’s low localization rate, inconsistent policies, and heavy tax structure remain major hurdles.
For Pakistan’s auto sector to grow sustainably, experts agree: policy consistency, localized manufacturing, and balanced trade protection will be key to driving affordability and long-term stability.
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