The government is preparing a new auto policy aimed at reducing car prices and boosting local manufacturing in Pakistan.

The proposed policy focuses on increasing the local production of auto parts, which officials believe will significantly cut vehicle costs and strengthen the domestic industry. The plan was discussed in a high-level meeting chaired by Special Assistant to the Prime Minister Haroon Akhtar Khan, along with representatives of the auto parts sector.

During the meeting, Haroon Akhtar Khan emphasized that the core objective of the new policy is to promote local manufacturing and reduce reliance on imports. He also advised industry players to shift towards electric vehicle (EV) technology to stay competitive in the global market.

The Engineering Development Board has been directed to work closely with all stakeholders to develop a comprehensive and effective policy framework. Officials said the government is considering tax and duty adjustments to make vehicles more affordable, especially for middle-income consumers.

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The policy may also include special incentives for producing electric vehicle parts locally, encouraging investment in modern technologies. According to officials, the new auto policy is expected to be introduced by July 1.

Reports suggest that small electric cars priced below Rs 1 million could be launched later this year, offering a major relief to buyers struggling with rising car prices.

Industry representatives, however, raised concerns about unequal duty structures and urged the government to support small and medium manufacturers, stressing the need for true local production rather than simple assembly.