Now that the new auto policy has been approved, car prices in Pakistan are expected to gradually decline as a result, Prime Minister's Adviser on Industries and Production Haroon Akhtar has said.

Under the policy, carmakers will not be permitted to collect more than 20% of a car's price as an advance payment from buyers.

Addressing a press conference in Islamabad alongside Federal Information Minister Attaullah Tarar, Akhtar said the policy had been approved following extensive consultations. It aims to increase exports from the auto sector from the current US$ 200 million to US$ 6 billion.

Exports get top priority

Akhtar said that although policies for the auto sector had been formulated over the past 10 years, exports had not recorded any significant growth. He added that considerable work had gone into developing an export-focused policy this time, with vehicle exports receiving particular priority.

Manufacturers that fail to meet their export targets will face penalties. Akhtar said the anticipated reduction in car prices would primarily benefit middle- and upper-income groups.

To bring vehicle quality in line with international standards, 45 additional standards have been incorporated into the policy. Akhtar said this would help position cars manufactured in Pakistan among the best in terms of quality.

Greater focus on electric vehicles

The adviser said the government was placing particular emphasis on electric vehicles, as their importance had increased following recent regional tensions. The financing limit for electric vehicles has been increased to PKR 10 million (US$ 36,100) to encourage their adoption. Import duties on electric vehicle charging stations have also been reduced.

Akhtar said the new policy aims to improve vehicle quality, reduce prices, expand electric vehicle adoption and increase exports. He also stated that large-scale industries remain a government priority, with the automotive industry playing an important role in large-scale manufacturing.