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Aftab Maken
ISLAMABAD: Pakistan’s car market is facing a big shock following the Federal Budget 2025-26. Major car makers like Pak Suzuki Motor Company and Lucky Motor Corporation (LMC) have announced sharp price increases on their vehicles, effective July 1, 2025.
These hikes come after the government raised the sales tax from 12.5% to 18% and introduced a new “New Enhanced Value (NEV) Levy.” This has made buying a car much harder, especially for middle and lower-income families.
The news has quickly spread, with terms like “car price hike Pakistan,” “Federal Budget 2025-26 impact,” and “NEV levy explained” trending on social media and search engines.
The government’s decision to increase sales tax and add the NEV levy has raised production and selling costs for car companies. Industry experts are now discussing how these changes might slow down the growth of Pakistan’s auto industry and make cars less affordable for many people.
Pak Suzuki’s Price Increases
Pak Suzuki, a leading name in small cars, has raised prices on many of its popular models.
- Alto VXR price increased by PKR 167,861, now costing PKR 2,994,861.
- Alto VXR AGS rose by PKR 177,480 to PKR 3,166,480.
- Alto VXL AGS went up by PKR 186,446 to PKR 3,326,446.
Mid-range models like the Cultus and Swift have also become more expensive. The Cultus VXR increased by PKR 40,490 to PKR 4,089,490, and the Swift GL MT now costs PKR 4,460,160. The CVT versions of the Swift have also seen price rises of around PKR 45,000 to PKR 47,000. Pak Suzuki says these hikes are due to the new tax policies, leaving them no option but to pass the costs to buyers.
KIA Motors Follows with Big Price Jumps
Lucky Motor Corporation (LMC), which assembles KIA cars in Pakistan, has also raised prices, with some models going up by as much as PKR 700,000 since July 1.
- Picanto AT increased by PKR 150,000 to PKR 4,090,000.
- KIA Stonic EX Plus jumped by PKR 499,000 to PKR 5,999,000.
- Stonic X rose by PKR 95,000 to PKR 4,862,000.
In the SUV category:
- Sportage L Alpha increased by PKR 400,000 to PKR 8,899,000.
- Sportage L FWD is now PKR 10,499,000 after a PKR 500,000 hike.
- Sportage L HEV went up by PKR 600,000 to PKR 11,599,000.
High-end KIA models like the Sorento AWD HEV and Sorento EMI AWD HEV saw increases of PKR 700,000, now priced at PKR 16,699,000 and PKR 17,199,000 respectively. The luxury MPV Carnival also rose by PKR 700,000 to PKR 18,200,000.
Understanding the NEV Levy
The new NEV (New Enhanced Value) levy targets traditional internal combustion engine (ICE) vehicles. Its goal is to encourage buyers to switch to “New Energy Vehicles” like electric and plug-in hybrids. While this policy aims to promote cleaner transportation and increase government revenue, it has also raised the cost of conventional cars, making them less affordable for many.
What This Means for Consumers and the Market
These tax changes have pushed car prices higher across Pakistan, making it tougher for many people to afford vehicles. This could slow down car sales and affect not just manufacturers but also dealers and suppliers. As the market adapts, consumers are advised to stay informed and carefully consider their options before making a purchase.
