Federal Minister for Industries and Production (MoI&P), Ghulam Murtaza Khan Jatoi has ordered an investigation into an increase in price of cars by one of the local assemblers "without any justification". M/s Pak Suzuki Motor Company (PSMC) - Pakistan's top car assembler by market share - has increased prices by 3% ie Rs 20,000 to Rs 30,000 with effect from August 1, 2016.
An official in the Engineering Development Board (EDB) told Business Recorder M/s Pak Suzuki has been asked to stop production of Mehran and Cultus. However, the company has not given any weight to the EDB's communication. Ministry of Industries and Production reportedly sends a list to the local assemblers for delivery of cars on priority to some "special "individuals, and the Minister for Industries and Production has taken notice of increase of prices by one car company. "Private companies should focus on quality of cars instead of increasing prices," the statement quoted the Minister as saying.
Insiders claim that it has been brought to the knowledge of Ministry of Industries and Production at the highest level that EDB has a role in extending "financial benefits" to the auto industry with special reference to import of accessories and that at some stage this issue can land in National Accountability Bureau (NAB).
According to the newly implemented Auto Policy 2016-21, the three local assemblers were required to install immobilizers in all the models but two companies obtained stay orders from the courts whereas the third has sought time to implement this condition.
A Parliamentary panel headed by PTI stalwart Asad Umar has sought original agreements of the three "big" Japanese local cars assemblers along with relevant salient features as the companies are said to be making massive profits.
Chief Executive Officer (CEO) EDB, Tariqa Ejaz apprised the panel that he has not seen any contract documents between the Original Equipment Manufacturers (OEMs) ie M/s Suzuki, M/s Honda and M/s Toyota with the government of Pakistan. The three companies were required to change their models after every three years but they are not honouring the agreements.
"It is unfortunate that export of cars in our neighbouring country has increased by four per cent, but the quality of Pakistani cars is poor," the Minister added. Jatoi maintains that it is the responsibility of the federal government to ensure satisfaction of Pakistani consumers on the quality of cars. The Minister, who was not taken on board at the time of preparation of Auto Policy 2016-21, directed the EDB to investigate the reasons for the increase in prices and submit a report to him within a week.