KARACHI: The government is mulling over a proposal to amend the duties and taxes regime in the new auto policy in order to bring vehicles within the reach of the middle class.

“Prime Minister Shehbaz Sharif is keen on making vehicles cost effective for the middle class,” the CEO of the Engineering Development Board (EDB), Hammad Ali Mansoor, told a media briefing on Monday.

Three small electric vehicles in completely built-up form are due in Karachi during the third quarter of this year. This will be followed by work on building mega assembly plants in Karachi and Lahore, he added.

Initially these vehicles will be priced at less than one million rupees, Ali Mansoor said.

The auto policy, which is likely to be announced on July 1, has been forwarded to the ministry for presentation to the prime minister. “No assembler has sought any extension in the current policy,” he said.

The CEO did not disclose other salient features of auto policy, but said the prime minister’s focus is on making small cars affordable for the middle class.

Mr Ali said that the massive increase in petrol and diesel prices had pushed a number of buyers towards electric vehicles. “Sales of electric vehicles saw a three-fold increase in March,” he added.

He expressed the hope that the landscape of electric vehicles would change in coming months as two to three lithium battery makers are due to start operation this year.

An auto sector expert, Mashood Ali Khan, informed the EDB CEO that auto parts manufacturers were on the decline despite an increase in the number of vehicle assemblers.

Another problem, he said, is that the new entrants import localised parts leviable at 25pc import duty, but they continue to import parts under CKD kits after paying 15pc as customs duty. He emphasised that the new auto policy must prioritise SME auto parts, the backbone of the economy, which have developed. Govt must ensure actual manufacturing, not just assembly, in Pakistan.

Mixed trend

Amid the US-Israel war against Iran, buyers showed a mixed trend in purchasing new cars, vans, pickups and SUVs. Pak Suzuki sales during March plunged by 23pc to 6,250 units versus 8,160 in February 2026 while 9MFY26 sales swelled by 32pc to 65,706 units year on year (YoY).

Hyundai Nishat sales fell by nine per cent to 928 units in March from 1,021 units in February while its sales recorded a 33pc rise in 9MFY26 to 9,682 units YoY.

Indus Motor Company (IMC) sales partly grew by one per cent to 3,873 units in March from 3,817 in February while total sales in 9MFY26 surged by 54pc to 33,313 units YoY.

Honda Atlas Cars Limited (HACL) and Sazgar Engineering sales rose by 10pc and three per cent to 2,324 and 1,734 units in March as compared to 2,114 and 1,682 in February. Honda and Sazgar sold 20,097 and 12,630 units in July-March FY26, showing a growth of 57pc each YoY.

As a result, total sales of cars, vans, pickups and vans plunged by nine per cent in March (month on month) but rose by 40pc YoY. Total sales in 9MFY26 grew by 43pc to 144,029 YoY.

Published in Dawn, April 14th, 2026