The Competition Commission of Pakistan (CCP) is expected to come up with important recommendations for the automobile sector to end the exploitation of Pakistani consumers who are suffering due to lack of choices in getting new cars. Sources in the CCP told Business Recorder that the CCP may issue an opinion or policy note pertaining to the auto sector with some key recommendations. The recommendations for the automobile sector would play an instrumental role in improving demands and supply situation of the automobile in the country.
In a recent open hearing at the CCP, Chairperson Vadiyya Khalil said that the automobile sector plays a crucial role in generating an economic activity in the country, providing employment to a large number of people and contributing to the national kitty through payment of taxes and other relevant duties and charges. However, she said the CCP continues to receive concerns and complaints regarding the pricing of locally made cars, safety features, technological issues, delivery of vehicles, payment of premiums, and progress on localization of auto industry and deletion programs. The open hearing, she said, has been organized to discuss those and other relevant issues so that CCP can take necessary measures under its mandate to help resolve those issues.
A heated debate took place among different stakeholders. The consumers complained of long delays in the delivery of vehicles after bookings, premiums charged by dealers, increasing prices of cars, and lack of safety features in the locally made cars.
The representatives of used car importers suggested to allow the import of new cars on commercial basis, as opposed to the current practice of under transfer of residence and gift schemes, so that people have more options of choosing cars.
The official of Excise and Taxation Islamabad said that his department will support any policy measure to curb the practice of charging premiums by dealers. The official of FBR said that matters relating to import duties on vehicles have been decided by the Ministry of Commerce and not the FBR. The official of Ministry of Commerce said that they are soliciting proposals from various stakeholders on the forthcoming budget including those in the automobile sector and asked the attendees to send their proposals to the ministry.
In her concluding remarks, Chairperson Vadiyya Khalil thanked the participants and said that CCP will analyze the deliberations of the open hearing and other pertinent facts and issue its opinion into the matter.
The consumers insisted that despite paying huge amounts of money to buy the locally assembled cars, they are not getting timely delivery of cars. Similarly, they blasted the government's policy of not allowing the new car imports on commercial basis instead of gift schemes which is limiting their choices. They also complained that Pakistani government's agreements with the parent companies of local car assemblers were only favoring the companies and not the consumers.
However, the participants of the open hearing were rejoiced when the Engineering Development Board's representative informed that eight new auto makers including passenger car makers from European countries were given permission to set up car assembly plants in Pakistan. Market experts are of the view that this will end the monopoly of Japanese car makers in Pakistani market, besides reducing the gap between demand and supply.
The CCP's open hearing on the automobile sector in Pakistan was held to get the perspectives of all stakeholders on pertinent issues in the sector. The CCP's bench, comprising Chairperson Vadiyya Khalil and Members Dr Shehzad Ansar and Dr Muhammad Saleem conducted the open hearing that was attended by the representatives of Federal Board of Revenue, Ministry of Commerce, Engineering Development Board (EDB), Excise and Taxation, representatives of auto manufacturers including Indus Motor Company Limited, Pak Suzuki, Pakistan Automobiles Manufacturers Association (PAMA), Pakistan Automobile Assemblers Dealers Association (PAMADA), Pakistan Association Of Automotive Parts & Accessories Manufacturers (PAAPAM), online platforms including Pakwheels, car importers, and consumers in a large number.
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