ISLAMABAD: Honda Atlas said that it expects Pakistan’s auto industry to grow 25% next year as the automaker expands its hybrid lineup, increases production and aims to strengthen its market share despite ongoing policy uncertainty.
Honda Atlas management said the company remains confident about future demand despite challenges such as changing tax policies, import costs and uncertainty over the government’s upcoming auto policy.
The company said the new auto policy has not yet been finalized, however some tariff changes were announced in the latest federal budget. More details are expected once the government officially issues the policy.
Management said customs duty on some hybrid vehicle parts may increase from 4% to 5%, although the proposal has not been finalized. Import duties on completely knocked down (CKD) vehicle parts remain unchanged at 30% for non-localized parts and 46% for localized parts. Duties on completely built units (CBUs) now range between 30% and 50%, depending on engine size.
Honda Atlas said profit margins remained under pressure because the Thai baht weakened against the U.S. dollar, increasing the cost of imported parts. The company chose not to fully pass these higher costs on to customers.
The company said the Honda City remains its best selling model. It is priced at about Rs4.9 million, keeping it below the Rs5 million threshold to qualify for the lower 18% sales tax. Vehicles priced above that amount are subject to a 25% sales tax.
Management said the Honda City contributes about 70% of total sales, while the Civic and HR-V each account for about 15%. Within the Honda City lineup, the 1.2-liter model represents around 85% of sales, with the 1.5 liter version making up the remaining 15%.
Honda Atlas said the HR-V now has a localization level of 61%. Conventional fuel models account for about 55% of HR-V sales, while hybrid versions contribute 45%. The company also confirmed it has discontinued the BR-V as part of its product strategy.
The company is currently operating at about 52% production capacity but expects utilization to improve with higher demand and future model launches.
Management also said imports of used vehicles have declined sharply in recent months after changes to import rules. Officials added that the government is still reviewing its policy on commercial used-car imports, making it too early to assess its impact.
Honda Atlas said expanding its hybrid technology remains a key priority. The company is willing to accept lower profit margins in the short term to strengthen its position in Pakistan’s growing hybrid vehicle market.
During April 2026, Honda Atlas sold about 2,700 vehicles, including around 2,000 Honda City, 300 Civic, and 400 HR-V units, reflecting steady demand as the company prepares for future growth.
