If you've ever dreamt of owning a BMW or a brand-new Toyota Land Cruiser in Pakistan but found the price tag too steep, Budget 2025 may just have changed your reality.
In a sweeping move that stunned the auto industry, the Government of Pakistan has dramatically reduced customs duties and taxes on imported vehicles, leading to historic price cuts — some as high as Rs50 million. This policy shift is poised to revive the luxury car segment, which has long been dormant due to sky-high import taxes and economic uncertainty.
What Changed in Budget 2025?
Budget 2025 introduced reforms aimed at reviving high-end consumption and boosting investor confidence in Pakistan’s automotive industry. Key among these was a targeted reduction in customs duties, lowered Federal Excise Duty (FED), and eased regulations on the import of premium and hybrid vehicles.
Finance Minister’s Statement:
"These reforms are part of our broader economic revival strategy, which includes incentivizing foreign brands, encouraging local investment, and responding to pent-up demand in the upper-class vehicle market."
BMW Drops Prices Across the Board
Dewan Motors Slashes BMW Prices by Millions
Dewan Motors, the official distributor for BMW in Pakistan, has responded swiftly to the policy changes by reducing prices on nearly all high-end models — a rare move in the luxury car sector.
| Model | Old Price (PKR) | New Price (PKR) | Price Drop (PKR) |
|---|---|---|---|
| BMW X7 M60i xDrive | Rs18.68 crore | Rs13.9 crore | Rs4.78 crore |
| BMW 218i Gran Coupe | Rs3.33 crore | Rs2.88 crore | Rs45 lakh |
| BMW M2 | Over Rs13 crore | Under Rs10 crore | Over Rs3 crore |
| BMW M4 | Over Rs13 crore | Under Rs10 crore | Over Rs3 crore |
“This is an unprecedented correction. We expect a resurgence in high-end vehicle imports, especially in urban centers like Lahore, Karachi, and Islamabad.”
— Ali Raza, Auto Industry Analyst
Toyota Matches BMW with Major Land Cruiser Discounts
Toyota Indus Slashes Land Cruiser Prices (Effective July 1, 2025)
Toyota Indus Motor Company has announced massive reductions on the iconic Land Cruiser lineup, effective immediately.
| Model | Old Price (PKR) | New Price (PKR) |
|---|---|---|
| Land Cruiser LC300 (Petrol) | Rs12 crore | Rs9.5 crore |
| Land Cruiser LC250 (Diesel) | — | Rs6 crore |
| Land Cruiser LC250 (Petrol) | Rs6.66 crore | Rs5.5 crore |
Note: All prices are ex-factory, inclusive of Sales Tax, FED, and dealer margins — excluding delivery and insurance.
What’s Behind These Bold Reductions?
The government’s tax relaxation is part of a multi-pronged strategy:
- Reviving the high-end vehicle market
- Generating indirect tax revenue via increased car sales
- Attracting foreign investment in automotive assembly plants
- Countering luxury car smuggling by legalizing imports
According to the Pakistan Automotive Manufacturers Association (PAMA), vehicle imports had dropped by over 70% between 2022–2024 due to harsh duties. These revisions are expected to reverse that trend quickly.
Who Benefits the Most?
While middle-class consumers may not benefit directly from these reductions, there are ripple effects throughout the economy:
- Wealthy individuals can now make long-delayed purchases
- Used car dealers and importers expect a surge in business
- Local dealerships anticipate higher footfall
- Auto vloggers and influencers gain more content opportunities
“This opens the door to not just purchases, but an entire ecosystem around luxury cars — from after-sales service to car leasing and insurance models.”
— Shahbaz Akhtar, Auto Industry Analyst
Economic & Policy Implications
- Boost in consumer confidence
- Improved foreign exchange inflows
- Incentives for foreign automakers to localize
- New job creation in logistics and auto services
Ernst & Young estimates that each luxury vehicle sold creates Rs1.2 million in indirect economic activity in Pakistan’s economy.
Suggested Visuals & Media
- Infographic: BMW vs Toyota price drop chart
- Video: “Pakistan’s 2025 Car Market Transformation”
- Photos: BMW showroom, Land Cruiser in city, Budget 2025 press event
Frequently Asked Questions
Will prices for used luxury cars also drop?
Yes, used car prices will likely soften due to competitive new imports entering the market.
Is this tax relaxation permanent?
The current structure is for FY 2025. The next budget may revise it depending on market performance.
Can overseas Pakistanis benefit from this change?
Yes, those using TR or gift schemes can now import vehicles at more favorable tax rates.
Summary: What Does This Mean for You?
Luxury cars in Pakistan are no longer just aspirational. Thanks to Budget 2025’s tax reforms, BMWs and Land Cruisers are now significantly cheaper — a move that could spark a luxury car boom and transform the auto economy.