A new report by the Pakistan Institute of Development Economics (PIDE) suggests that car prices in Pakistan may decrease in the coming years, potentially boosting car ownership across the country.
The study examines the effects of ongoing tariff reforms on the auto sector, projecting that while certain jobs in the local automobile industry may be impacted, new employment opportunities and businesses will also emerge.
The report highlights that significant changes in customs duties are expected as part of the government’s five-year tariff reform plan.
Under the plan, the average tariff rate is anticipated to drop from 19% to 9.5%. Import duties on vehicles are likely to be reduced from 20% to 15% over the next five years, while additional surcharges on used vehicles are planned to be eliminated entirely by 2030.
According to PIDE, smaller and weaker auto brands may struggle to survive in this new environment, whereas established global companies will likely benefit.
However, the report also warns that increased vehicle imports could put additional pressure on foreign exchange reserves and the national currency. To counter this risk, the study emphasizes the need to boost exports and strengthen Pakistan’s external trade balance.
