There’s been a lot of talk lately about whether car prices in Pakistan will drop following the government’s deal with the International Monetary Fund (IMF). The IMF has specifically asked the Pakistani government to reduce trade barriers, particularly the tariffs and regulatory duties. This move is part of Pakistan’s commitments under the IMF program, which encourages countries to open up markets and reduce protectionist policies.
However, the IMF has not asked for any changes in the pricing or taxation of locally manufactured vehicles. So, the assumption that all cars in Pakistan will become cheaper is misleading.
Government’s Response
The Pakistani government has responded by stating that in its Auto Policy 2025, it will gradually reduce regulatory duties (RD) on imported vehicles over a period of five years. But they’ve made it clear — these duties won’t be completely removed.
This means:
- Local car prices will remain the same, at least in the short term.
- Imported cars may become slightly cheaper, but not drastically.
Will Local Cars Prices Drop?
No. Since the IMF recommendations only apply to imported vehicles, local cars will not see a drop in prices. The idea that famous cars like the Alto, Toyota Corolla, Honda City or other popular models will suddenly cost 20 to 30 lakhs is false.
However, the reduction in duties on imported cars may increase competition for local manufacturers. This could put pressure on them, especially if imported vehicles become more appealing to consumers. But even that will take time, and local manufacturers are unlikely to slash prices any time soon.
A Warning from Australia’s Model
Suneel also pointed out that Australia once had a local auto industry, but over time, it completely shut down and shifted to fully importing cars. If Pakistan aggressively promotes imported vehicles while neglecting local production, it could risk a similar outcome — which would hurt the country’s long-term auto industry.
This is important because the government has also been encouraging local car manufacturers to export vehicles. But that becomes difficult if imported cars are made too cheap and attractive.
What About Used Imported Cars?
Currently, Pakistan imports around 60,000 to 70,000 used cars from Japan annually, including high-end vehicles like Land Cruisers. According to Suneel, these cars may see a slight price drop, but not a massive reduction. So, while there might be minor savings, don’t expect used imported vehicles to become extremely affordable either.
So, Will Car Prices Go Down?
To sum it up:
- Local car prices will not decrease in the short term.
- Imported cars might get slightly cheaper, but it will happen slowly and not drastically.
- The impact will only begin after June 2025, when the government decides how much regulatory duty to reduce.
- Even then, it will take 2-3 months for the effects to show in the market.
- No major price changes are expected this year (2025).
So for now, if you’re planning to buy a car, it’s better not to delay your decision based on misleading news. Stay informed, and keep an eye on official government announcements later this year.
