The federal government has started preparations for the new “Auto Industry Development and Export Policy 2026-31” with the goal of making car ownership easier for the public while supporting the revival and growth of Pakistan’s struggling automobile sector.
According to officials, discussions are currently underway with the State Bank of Pakistan and key industry representatives regarding several proposed measures designed to improve car financing facilities for consumers. Under the proposed policy, the repayment period for car financing may be extended to seven years, while the minimum down payment requirement could be reduced to 15 percent. Authorities are also considering increasing the financing limit for locally manufactured cars up to Rs10 million.
The upcoming policy also focuses heavily on consumer rights and protection. Officials are considering introducing fixed booking prices for cars to protect buyers from unexpected price increases after booking. In addition, booking deposits may be limited to only 20 percent of the total car price. Manufacturers that fail to deliver cars within 30 days of the promised delivery date could face a penalty of 3 percent. Local car manufacturers would also be fully responsible for warranty-related matters.
The government is also planning gradual regulations for imported used cars while slowly removing import tariff premiums by the year 2030. The aim is to create fair competition in the market and help make cars more affordable for consumers.
Electric and new energy cars are expected to receive major incentives under the new policy. Authorities plan to establish around 3,000 charging stations across the country by 2030 to support the growing electric car market. In Islamabad, electric cars may receive complete exemption from registration and token taxes. The government also plans to begin shifting official government fleets to electric cars starting from December 2027.
Through this five-year policy, the government hopes to increase annual car production to 500,000 units, achieve $1 billion in auto exports, and expand local parts manufacturing to strengthen Pakistan’s economy and automobile industry.
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