New Auto Policy will Cut Import Duties by 80%

Pakistan’s auto industry has been struggling to survive over the years, as the average citizen lacks the finances to purchase brand new vehicles. It doesn’t help that the car financing system isn’t developed enough to facilitate such people.

With a revised car policy, automotive stakeholders have proposed a reduction of 80% in the import duties in an effort to boost auto trading in the country.

As it stands, close to 70% of the cars are acquired via car financing in other countries. Meanwhile, a mere 30% of people Pakistan take advantage of this option.

Reduction of 80% in import duties has been proposed to boost auto trading in Pakistan

According to the Pakistan Association of Automotive Parts and Accessories Manufactures (PAAPAM), localization is the key to success in the industry. It’s the only plausible means of providing local customers with the kind of facilitation that they have always been in need of.

While some automakers have tried their luck in this regard with production and operations from within Pakistan, they ultimately had to abandon such endeavours due to the country’s non-restrictive auto policies.

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70% cars are acquired via car financing in other countries while in Pakistan, it’s at 30% 

At the end of the day, it’s the customers who are bearing the brunt of all this due to a limited number of options available to them. A number of Chinese car manufacturers have also expressed interest in the Pakistan auto industry. However, they’ve also been discouraged to enter the market for one reason or the other. As a result, the less competitive automotive market pushes car makers to charge higher prices from customers.

What reforms will the new Auto Policy bring?

Other than the 80% reduction in custom duties for the next 5 years, there are a number of other reforms in the new proposed auto policy, which are listed below.

  • Car manufacturers will be required to produce a new design for their car model after every 10 years
  • Manufacturers will be required to install car theft alarms in every vehicle they produce
  • A car recall system has been presented for situations where there is a fault in the production line
  • In order to prevent delays, the policy proposes 50% of the total price to be paid at the time of purchase and remaining at the time of delivery

What’s in store for the future?

When and if implemented, the new auto policy will benefit both the upper class and low income citizens of Pakistan. The policy makers are looking to encourage motorcyclists who’ve wanted to switch their vehicles with a small car, but haven’t been able to do so thus far due to the rising car prices. The country’s car market is expected to get mature with the arrival of new car manufacturers.

Eventually, this may lead to vehicles that follow the international standards of safety and security. If granted an approval, these reforms can potentially drive a significant improvement in Pakistan’s economy in the longer run.

via Carmudi

Update

Please understand that this is auto policy is proposed by industry stakeholders, and government may or may not approve it. We are hearing that Government is interested in relaxing huge duties, especially for hybrid cars so there is some hope.

However, confirmation for this proposed auto policy will only be received after official announcement from the government.

We will keep you posted with any updates, when they will be available.


  • abbasi506

    looks better

  • Taa

    Also hopefully force local manufacturers to compete with better vehicles at lower prices instead of the total nonsense which prevails currently.

  • Pakkhappay

    I think government should ban auto industry alltogether,,, Because of poorest infrastructer…. In working hours coming from Pindi to ISb and going back really sucks…!! There should be some donkey cart and bicycle policy…!!

    • The Annoying One

      maybe start producing lesser children then? It’s the population not really the infrastructure which although not best is good enough.

      • PakKhappay

        No baby not like this,, its poor planning,, by not developing more cities… by having only few places to work,, Its short term fag policies…and due to people who do nothing and not let others do….!! if population was issue why balochistan is deserted….!!

  • The government should remove the duty on importing vehicles from markets like Japan altogether. Or at least completely remove them for Hybrids and EVs. Competition from these import vehicles is the only thing that would get our local manufacturers to actually start producing some usable vehicles and stop charging a fortune for the piece of crap they currently sell.

    Also, the manufacturers should be required to introduce a completely new design every 5 years instead of 10.

    • Felix

      If we don’t have options then companies like Pak Suzuki will continue taking advantage by offering same mehran for at least 3 more decades

      • AbdulBaqi1

        its not suzukis fault. our country hasn’t made any policy about vehicle safety.

    • Ch Ahmed Johal

      slam. bro is there any relaxiation in the duty of imported japnese cars?

    • AbdulBaqi1

      you think hybrids are bought in bulk here? do you have any suggestion what should be done about their batteries when they have no charging cycles left?

    • ali

      Can anyone tell the procedure how to important hybrid car from japan?

  • Eli Ehsan

    to put the LOCAL MANUFACTURING in perspective.. MEHRAN hasn’t changed even a tiny bolt in its design since 94!!

    • Raja Maja

      WRONG!
      they have changed the headlights…………….anni dia
      they have changed the Bumpers…………….anni dia
      they have changed the dash board…………same as above
      they have changed the carborator to EFI system…….same as above
      what else you need and price just have changed from 110,000/- to 670,000/- against all these HOLE change.

      • Umar Bajwa

        One thing you forgot to mention they changed the design of car key which is a very prominent feature.

      • abobobilly

        ‘anni dia’ … i like your sarcastic touch.

  • Awais Zafar

    when this New Auto Policy going to Apply ???

    • Imtinan ChaudarY

      seems like never ever :P

  • ICC World Cup 2015

    very nice

  • Baber

    I don’t want to be that guy but that is incorrect information. The person who was incharge of the auto policy, Chariman Privatization Commission was sacked due to pressure from the Big Three and every part mentioned here is redacted from the latest draft of auto policy. Cheers.

    • Saqib

      can anybody confirm it?

  • Yasir

    fake news! please verify your statistics before posting such news as this will only exploit people decision making to purchase their next vehicle and then feel annoyed once this is not implemented!

  • Imran

    Govt shall reduce the import duty since local manufacturer are unable to provide quality product in Pakistan. They have very poor quality and after sale support is pathetic.

  • Imran Supariwala

    You wrote the whole article about “import duties being cut by 80%” but its confusing and you completely failed to mention if its import duties on complete knock down kits that local auto assemblers import from Japan are being reduced or duties on imported Japanese vehicles being reduced !!!!!!!!!!!!

  • Imran Supariwala

    Local auto industry is acting like a cartel,they are not giving and relief to consumers who have to waits months to get delivery of their cars even after paying exorbitant prices for a product which can’t compete with cars available in rest of the world with similar price point. Consumers here are willing to pay their hard earned money but in the end what they get is endless wait and eventually they are forced to pay on money for an inferior product.

    Govt should have mercy on local consumers and relax import duties on Japanese vehicles until local assemblers (they can’t be called manufacturers,they’re mere assemblers) stop fleecing consumers and start producing quality products with safety option and get their delivery timings correct.

  • Salman U.

    Do we have a infrastructure to digest new vehicles on a Road?

  • Iftikhar Shah Gilani

    Since last 2 decades local Auto Manufacturers had made cartels against Federal Govt to stop allowing reconditioned cars. Earlier Liaqat Jatoi Federal Minister of Industrie had a meeting with Local Auto Manufacturers officials and withdrawn allowing Reconditioned cars.
    I think that reduction in import duty’s benefits will go to upper class and common men willnhave to depend on bikes only.

  • qasim

    not better agay he lahore ma traffic jams bht haie n pollution b ,,,,,govt should discourage car use.instead of promoting car sector

  • Dr. Aamir Liaquat Hussain

    Can you please describe what propakistani.pk is all about? @aamir7:disqus
    This is all in one blog, never read an article not related to automotive industry on pakwheels, maybe they are mature.

  • Muhammad Yasir

    IF this happens , will the car prices FALL DOWN in reality… or will we STILL be charged 0.6 mil for mehran ???

    ALSO , will chinese car manufacturers be allowed to introduce products in the LOCAL Pakistani market ?

  • Farrukh Khan

    Very good proposal, because we dont get good cars from our local auto mafia and mafia in government dont allow us to import from out side Pakistan by imposing stupid amount of taxes and most importantly discouraging new investments and new automanufactures .

    So Its great if it happens, we will atleas get good and quality vehicles at reasonable price.

  • Nasir

    from the last 5 years I am hearing same news in every year in April-May, the reality is this is never ever gonna happen, only the big investors and car dealers took advantage of these types of news every year.

  • Hasnu

    Infrastructure isn’t robust.. Agreed..! but solution doesn’t lie in banning the auto industry or increasing road capacity or by producing less children. We urgently need mass transit system in Pakistan. What is this is an electrical railway intracity transport (Metro Train System) which would become another way of transportation and divide the traffic, lessen it, increasing road capacity. Current situation is catastrophic.. you want to reach school/college/university/office–> way if transport–> By Road. You have an emergency–> way of transport–> By Road. You want to go anywhere for whatsoever reason–> way of transport–> By Road. And all those roads has been congested now. So by reducing the duty to 80% would only cease Pakistan..!

  • Abdullah

    Suzuki, Honda, Toyota – Three Japanese manufacturers monopoly over Pakistan car market.This is NO accident but treachery by rulers of this country who get kickbacks in awarding such lucrative contracts to foreign companies while blocking competition from local or other international players

  • Shahid Iqbal Butt

    Ayub helped his son for Auto business by giving duty free imports and Shirazi also befitted with this policy whereas commercial importers were highly taxed and the assemblers were enjoying duty free facilities but only tightening nuts and bolts without any manufacturing Bhutto nationalised this business for public sector thus doing economic murder of these businessmen and i stopped this businees and went into machinery business in 1973.

  • Shahid Iqbal Butt

    Auto policy had been highly regulated since 1960 for the benefit of few countries and firms. we lost our business in this feild being poineers in this business form 1935 representing Suzuki exclusively

  • Mian Sabahatullah

    NO. of cars will dramatically raise and our roads cannot afford such traffic!!!

  • Guy Chauhan

    if implemented, this’ll torn the current mafia altogether. and i strongly believe that this govt is doing just that without any care of thoughts to those who’ve limited imagination and idea of the current situation. But then there will be consequences hahaha (Pakistan) the roads will be littered with cars and traffic jams will be a national thing.

  • Abbas Sarfraz Sheikh

    New shape after every 10 years?? This means no Mehran, No Cultus, No Ravi and No Bolan.. Sad.. I was in love with the old shapes and never wanted to PS to change them ( Sarcasm).

  • MHF

    Government must come up with policy which encourage global manufacturers to start new assembly units in Pakistan with low end-user-price. Probably they should decrease 80% taxes for local manufacturer and assemblers, this will help in creating more jobs too. On other hand policy must make sure that local manufactures do decrease their prices after tax relief. Unfortunately currently local auto-manufacturers are acting as mafia!

  • Shahid Iqbal Butt

    All policies should be not at cost of consumers but at the competitiveness of producers and protection of consumers.

  • abid..

    Proposals become mafia, as Toyota and Suzuki did with Pakistani in the Past..
    As per plan the GOP will not allow car like the one they are being manufactured by Toyota,
    the production went sheer monopoly, as a counter balance GOP allowed small cars to be imported, the Toyota beside their desired plan took maneuver and got SRO from GOP to import small cars like witz cars…..
    ======================================
    what benefit was given to public against local manufacturing ??
    New proposed / revised import policy will indeed be a beneficial to general public…

  • Danish

    Relaxation on hybrid cars.. Cheapest hybrid car in Pakistan is more than 2.5 million . that class of people need relaxation?

  • Danish

    Pakistan auto industry should learn from TATA India. They are offering brand new nano car for just 1 lac where in Pakistan a new model of motorcycle is above 1 lac. Exchange rate difference is there but the cheapest mehran is above 6.5 lac.

    • Shahzaib Rehman

      1 Lac Indian Rupees = Approximately 2 lac Pakistani rupees
      Which is still an unbelievably low price for any new Car in Pakistan.
      I wish koi aisi TATA india type ki Car hi mil jaey Pakistan main 2 Lac ki new Car wow !

      • Mudassar

        100,000 INR = ~160,000 PKR

        • Shahzaib Rehman

          That is why I used the word “Approximately”.
          My point was not perfect accurate conversion of these currencies :P
          The point was how great would it be if we could buy a brand new car even in 2 Lac Pakistani rupees.

        • Shahzaib Rehman

          This is even more better :)

          • Mudassar

            :)

  • Shahzaib Rehman

    Kia Jannat baagh dikha diye hain yaar !
    I wish Government will approve this proposed policy now.

  • Atif

    Toyota, Honda and Suzuki have strong links in Govt and bureaucracy, don’t expext anything good to happen. They will keep selling their crap. Latest Toyota Corolla should have been banned bit see people don’t have a choice.

  • adil

    and the update ruined the happiness thanx amir

  • Zawyar Ur Rehman

    If this happens, then more people surely be able to afford a new car :) and that will be great for most of us :)

  • That is great

  • Ayyan Farooq

    Nothing will happen because the entire country is under the control of Mafia’s. Who cares.

  • Ijaz

    This is a fresh idea which can benefits middle to lower class families in Pakistan but I suspect car manufacturer will bribe government officials to scrap this idea as it is not in the interest of Pakistan car manufacturer “MAFIA”

  • Ahsan Siddique

    any update on this ? when this will happen ???