JDM are cheap because they are second hand and because Japanese people are rich...hence sell their used car cheap unlike Pakistan where a car retains its value. A locally build version will definitely be more expensive not cheap, logically.
A new Alto 660cc costs US 11,800/- in Japan. That is around 12 lac rupees. Now add cost of duty and amortized cost of setting a new plant. The manpower is lower here but most cars are built on assembly plants and robots so human cost is getting lesser by the day. Therefore, either the PKDM will be bare-stripped minimum with poor quality ( and high price) OR it will cost at least 12 lac or more.
Now who will buy a 660cc car for that price?
The only way for a new car to be cheap here is if it is completely locally mass produced. That is why they are cheaper in China and India and that is why Mehran is cheap here.