Auto Policy 2026-31 Approved by PM: 20% Booking Cap, $6bn Export Goal

Prime Minister Shehbaz Sharif has approved the final draft of Pakistan's Auto Policy 2026-31, the government announced in Islamabad on Saturday, 7 November 2026, after the IMF signed off on it. The headline changes for buyers: carmakers will not be allowed to take more than 20% of the price as booking advance, and the industry gets a $6 billion export target over five years. The policy still has to be approved by the federal cabinet, so no new prices or tax rates are in force yet.

Our earlier report covered the draft going back to the IMF; this update covers what was actually announced.

What was announced on 7 November

The policy was presented at a press conference by Haroon Akhtar Khan, Adviser to the PM on Industries and Production, and Information Minister Attaullah Tarar. Here are the confirmed points:

The 20% booking cap: the change you will feel first

For years, buyers have paid half or even the full price upfront and then waited months for delivery, while dealers charged "on-money" for quick delivery. The new rule says a manufacturer cannot ask for more than 20% of the car's price when you book.

What this means in practice:

• Less of your money is locked up while you wait for delivery.
• It should become harder to sell bookings at a premium, which is what feeds on-money.
• The rule only starts once the cabinet approves and it is formally notified. Until then, current booking terms of each company still apply.

New levy on bigger petrol cars, small cars exempt

The government plans an Automotive Development Levy (ADL) on internal-combustion vehicles. Cars of 1,000cc and below are exempt, so models like small hatchbacks in that class should not be hit. The money is meant to pay for EV incentives and export incentives, and Haroon Akhtar Khan called the plan "revenue-neutral".

The levy rate per engine size has not been announced. Earlier media reports (Dunya News, October 2026) estimated it could raise more than Rs 232 billion over five years, but that is an estimate, not an official figure.

Exports and localisation

Pakistan currently exports mostly auto parts, not complete vehicles. The policy wants carmakers to:

• Export more, with a $6 billion five-year target.
• Use more locally made parts and depend less on imported CKD kits and fully built (CBU) cars.
• Meet set targets to keep their incentives, or face penalties.

According to Dawn, the market today has 16 car and SUV makers and 100 two-wheeler makers, and the adviser said there is no monopoly.

EVs and hybrids

EV promotion is described as a major priority because fuel imports hurt Pakistan's import bill and push inflation. Earlier drafts reported in October proposed lower sales tax on EVs and plug-in hybrids and higher EV financing limits, but those rates have not been officially confirmed. Treat any "new EV price" you see online as a guess until the notification comes out.

Safety and non-custom-paid vehicles

Khan raised concerns about weak safety standards, especially in imported used cars, citing accidents from faulty brakes, tyre failures and seat belts that do not work. Tarar also said non-custom-paid (NCP) vehicles in Khyber Pakhtunkhwa are being addressed, with a plan to require all vehicles to be registered through customs and excise departments. This is worth watching for buyers in Balochistan too, where NCP vehicles are common, but no Balochistan-specific rule has been announced.

What it means for buyers in Quetta and Pakistan

• Do not rush or delay a purchase only because of this news. Prices will only change after cabinet approval and official tax notifications.
• Booking a new car? Ask the dealer in writing how much advance they need. Once the 20% cap is notified, anything above that should not be required by the manufacturer.
• Looking at a 1,000cc-or-smaller car? It is set to be exempt from the new levy, which may help keep small-car prices steadier than bigger models.
• Buying used? Safety and NCP rules may tighten. Check documents carefully and get a car inspection in Quetta before paying.

You can compare current listed prices on our new car prices page, browse used cars, or sell your car free if you are planning to upgrade.

Frequently asked questions

Is the Auto Policy 2026-31 final? Not yet. The Prime Minister approved the final draft after IMF clearance on 7 November 2026, but it still needs federal cabinet approval and official notification.

How much booking advance can a carmaker take under the new policy? Under the approved draft, a manufacturer cannot demand more than 20% of the vehicle price at the time of booking.

Will small cars be charged the new Automotive Development Levy? No. The government said vehicles of 1,000cc and below will be exempt from the ADL.

Have car prices changed because of the new auto policy? No official price changes have been announced yet. Any change depends on the final tax and levy rates, which have not been published.

Sources: Dawn – Auto policy sets $6bn export target over five years (8 Nov 2026); Dunya News – Pakistan approves auto policy 2026-31 (Oct 2026); TechJuice – Auto Policy gets in-principle approval (2026); PakWheels (8 Nov 2026).

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