Automakers shift responsibility to dealers over premium

Aftab Ahmed

Islamabad: A cartel of locally autos-makers have tactfully shifted the responsibility on car dealers for illegally charging, own money, the premium on delivery of the new vehicle.

A close aide of the Prime Minister held an important meeting on Monday that was attended by influential Japan-based car manufacturers in Pakistan who have been exploiting genuine consumers. All the governments including PTI have been helpless before this influential lobby of car manufacturers.

Advisor to Prime Minister on Commerce, Textile, and Industry Razzak Dawood chaired the meeting. Officials of the Engineering Development Board also attended a meeting.

During a meeting, Japanese car manufacturers ruled out receiving a premium on the delivery of cars. They said that car dealers were receiving money. They agreed to blacklist those car dealers involved in receiving a premium on the delivery of cars. However, they refuted allegations of receiving their own money.

Earlier, the cabinet had taken notice and decided to crack down on the cartel of Japan-based car auto manufacturers and their dealers in Pakistan for exploiting consumers by illegally charging ‘own money’ premium on delivery of new vehicles.

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The previous government of PML-N had approved a new automobile policy 2016-21 by offering tax incentives to new entrants to break cartels of Japan-based three auto manufacturers in Pakistan.

The PML-N government had brought a new auto policy to stop consumers’ exploitation by existing car assemblers. Local car assemblers had been enjoying different incentives like a duty. They had also failed to complete the deletion program. They had also been charging their own money from the consumers to deliver cars in time.

In the new auto policy, the government had also decided that payment made at the time of booking a vehicle should not be more than 50% of the total cost, and the delivery schedule of vehicles was set for two months. Car assemblers are bound to pay price at Kibor plus 2% prevailing on the date of final delivery in case the consumers face delay in delivery of cars.

However, the new auto policy had not caused any change, and the monopoly of the car manufacturers still continues. The consumers are still facing delays in the delivery of cars and they have to pay the premium and own money for the speedy delivery of vehicles despite making full payment.

Imran Khan in his recent meeting took up the agenda submitted finance division on the auto industry regarding the sale of new vehicles on more than the retail price in Pakistan.

During the discussion, it was informed that premium and own money which was charged by car dealers over and above the fixed market price of newly manufactured cars was the exploitation of car manufacturers in connivance with car dealers and needs to be stopped.

Prime Minister Imran Khan had formed a committee comprising of Law Minister, Minister Finance, and Advisor. This committee will develop a regulatory framework including penal provision if required within three weeks to check the illegal practice of charging premium by car dealers from the genuine buyers over and above the invoice price of the vehicle.

In doing so, capacity and production standards of different car manufacturers and vehicle safety standards may be focused on. The decision would be brought to the notice of the cabinet after doing needful. Officials said that the committee would submit its report to the cabinet for compliance.