ISLAMABAD: Prices of popular vehicles in Pakistan, including the Suzuki Alto, Cultus and Kia Stonic, could decline under the proposed Auto Policy 2026–31, which recommends removing the 2.5 percent Federal Excise Duty (FED) on locally manufactured and imported cars with engines up to 1,000cc.
According to estimates published by PakWheels, the proposed tax relief could reduce Suzuki Alto prices by up to Rs81,133, while buyers of the Kia Stonic Turbo S could benefit from a reduction of approximately Rs143,878.
However, the proposed FED removal has not been implemented. The draft auto policy remains subject to approval by the International Monetary Fund (IMF) and the Economic Coordination Committee (ECC).
The estimated reductions assume manufacturers pass the entire tax benefit on to customers, with all other price components remaining unchanged.
Expected Suzuki Alto, Cultus and Kia Stonic prices after FED removal
The following table shows estimated vehicle prices if the proposed 2.5 percent FED is removed and the full benefit is passed on to buyers.
| Car model | Current reference price | Estimated new price | Potential saving |
|---|---|---|---|
| Suzuki Alto VXR | Rs2,994,861 | Rs2,921,816 | Rs73,045 |
| Suzuki Alto VXR AGS | Rs3,166,480 | Rs3,089,249 | Rs77,231 |
| Suzuki Alto VXL AGS | Rs3,326,446 | Rs3,245,313 | Rs81,133 |
| Suzuki Every VXR | Rs2,965,200 | Rs2,892,878 | Rs72,322 |
| Suzuki Cultus VXL | Rs4,359,160 | Rs4,252,839 | Rs106,321 |
| Kia Stonic Turbo X | Rs5,499,000 | Rs5,364,878 | Rs134,122 |
| Kia Stonic Turbo S | Rs5,899,000 | Rs5,755,122 | Rs143,878 |
Source: PakWheels estimates, October 21, 2026. These are illustrative prices, not officially announced reductions.
Suzuki Alto prices could drop by up to Rs81,133
The Suzuki Alto, one of Pakistan’s popular small cars, could become more affordable if the proposed tax change is approved.
The Alto VXR, currently listed at Rs2,994,861 in the comparison, could fall to approximately Rs2,921,816, representing a saving of Rs73,045.
The Alto VXR AGS could see its price decline from Rs3,166,480 to Rs3,089,249, while the Alto VXL AGS could become Rs81,133 cheaper, bringing its estimated price to Rs3,245,313.
The Suzuki Every VXR could also benefit, with an estimated reduction of Rs72,322, taking its price below Rs2.9 million.
Suzuki Cultus VXL could become Rs106,321 cheaper
The Suzuki Cultus VXL is another model included in the estimated price comparison.
Its reference price of Rs4,359,160 could decline to approximately Rs4,252,839 if the proposed FED removal is fully reflected in the retail price.
This would represent a potential saving of Rs106,321 for buyers.
However, the actual reduction would depend on the final tax notification and the manufacturer’s pricing decision.
Kia Stonic could see the biggest price reduction
The Kia Stonic Turbo X and Turbo S could see the largest reductions in rupee terms among the vehicles included in the comparison.
Both variants feature a 998cc engine, placing them within the proposed tax relief category covering vehicles up to 1,000cc.
The Kia Stonic Turbo X could become Rs134,122 cheaper, reducing its estimated price from Rs5,499,000 to Rs5,364,878.
Meanwhile, the Stonic Turbo S could see a reduction of Rs143,878, bringing its estimated price down from Rs5,899,000 to Rs5,755,122.
The higher estimated savings reflect the Stonic’s higher reference prices rather than a different proposed FED rate.
Why is the government proposing FED removal?
The proposed Auto Policy 2026–31 includes several measures aimed at revising vehicle taxation and encouraging changes in Pakistan’s automotive market.
Removing the 2.5 percent FED on vehicles up to 1,000cc could provide relief to buyers of qualifying smaller-engine cars.
However, the broader draft policy also proposes other tax changes, including an Automotive Development Levy on conventional vehicles based on engine capacity.
Consequently, the final effect on car prices will depend on how the approved measures interact with existing duties and taxes.
When will car prices decrease in Pakistan?
No date has been confirmed for implementing the proposed FED removal.
The draft policy must first receive the required approvals, followed by the relevant government notification and implementation measures.
Even after approval, manufacturers would need to announce revised vehicle prices before buyers could determine the actual savings.
For now, the figures remain estimates rather than confirmed discounts from Suzuki or Kia.
Prospective buyers should therefore wait for official policy approval and manufacturer price announcements before treating the projected reductions as final.