Honda Atlas Cars Pakistan has revealed that it is intentionally keeping the price of the Honda City at around Rs. 4.9 million to ensure the popular sedan remains below the Rs. 5 million tax threshold. According to the company, vehicles priced above Rs. 5 million are subject to a 25% sales tax, while those below the limit are charged 18%, making the City more affordable for buyers.
During a corporate briefing, Honda Atlas said the Honda City accounts for nearly 70% of its total sales, making it the company’s best-selling model. Maintaining the vehicle below the tax threshold is aimed at preserving customer demand and keeping the sedan competitive in Pakistan’s automotive market.
The company also noted that its profit margins remained under pressure throughout the 2026 financial year. A weaker Pakistani rupee against the Thai baht increased the cost of imported components, but Honda chose not to pass the full impact of these higher costs on to consumers in order to keep the City competitively priced.
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Honda Atlas further highlighted that the government has proposed increasing customs duty on certain hybrid vehicle components from 4% to 5%, although the proposal has not yet been finalized. Meanwhile, customs duties on CKD non-localized parts remain at 30%, while localized parts continue to face a 46% duty.
For imported completely built-up (CBU) vehicles, customs duties currently range from 30% to 50%, depending on engine size, along with applicable Additional Customs Duty (ACD) and Regulatory Duty (RD).
Despite rising costs and tax challenges, Honda Atlas expects Pakistan’s automobile industry to grow by approximately 25% year-on-year and remains optimistic about maintaining or increasing its market share.
