ISLAMABAD – The prices of cars in Pakistan are expected to decline after the implementation of tariff reforms, a move that could significantly improve the purchasing power of ordinary citizens.
A study by the Pakistan Institute of Development Economics (PIDE) unveiled that high taxation rates and rising production costs in recent years have made car ownership increasingly unaffordable for the middle class. As a result, many households have been unable to purchase vehicles, limiting mobility and access to economic opportunities.
The upcoming tariff reforms, which include a reduction in import duties on Completely Built Units (CBUs) and lower tariffs on Completely Knocked Down (CKD) kits, are expected to reduce car prices. The experts believed this will make vehicles more affordable for families, leading to higher demand in the auto sector.
The study pointed out that as car ownership becomes more accessible, the benefits will extend beyond consumers, creating positive ripple effects for the auto industry and the economy.
The tariffs on CBUs are set to gradually fall from 20 percent to 15 percent over the next five years, while tariffs on used cars will align with new car rates by 2030.
The analysts say these measures could mark a turning point for the struggling middle class, making personal vehicles a realistic option once again.
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