Draft auto policy revs up hopes for cheaper vehicles

A proposed Auto Policy for 2026-31 could lower prices across several vehicle categories, with plug-in hybrids potentially becoming more than 20 per cent cheaper, Dawn reported. The draft keeps GST at 1pc for battery electric vehicles, while setting it at 9pc for plug-in hybrids and 6pc for range-extended electric vehicles. Industry estimates put possible price declines at 8-10pc for petrol cars and about 9pc for hybrids.

The proposal would also bring tariffs on localised CKD parts down to 15pc by FY31 from 25pc, a change Topline Securities says could hurt domestic parts suppliers as imports rise. PAPAAM chairman Abdur Rehman Aizaz said September imports included 2,407 new and 2,454 used cars, and estimated those 4,861 vehicles meant Rs7.3 billion in foregone revenue for local parts makers. The report also cites possible reductions for named electric, hybrid and petrol models, while warning that buyers could delay purchases as they await lower prices.