The 2016-2021 Pakistan Autopolicy has expired; which means it is time for the 2021-2026 auto policy to come into effect and show Pakistani auto consumers what it can do to help them. One of the issues that new car buyers have been facing for at least a couple of decades now is the erratic price hikes automakers keep slapping the potential customers with. The government is pondering upon an idea to monitor and regulate the prices of vehicles if needed under the new auto policy.
Whenever there is a new tax or dollar sees some movement, the common practice for the local companies has been to put all the burden of increased costs on the consumers. And this has caused a lot of dissatisfaction among the buyers and it has also been one of the reasons that has been encouraging the ‘own money’ trend on new cars.
Even though there were substantial cuts to the taxes in the last budget, and the government has been trying to promote local manufacturing by providing relief to these companies, yet they have been dropping price bombs on unexpecting customers left, right and centre. This is also a point of concern considering the auto manufacturers assured the government that they will control the random price bumps.
The latest suggestion is to form a price regulatory board that will have members from the auto manufacturing sector, the Ministry of Industries and Production, and the previously mooted Engineering Development Board.
The Ministry of Industry and Production who is directly connected to automakers has shown displeasure on the issue. The new auto policy which had already been delayed was supposed to be put up in front of the Economic Coordination Committee in the mid of 2021. The ministry will also be seeking guidance from the concerned departments from a legal perspective.
There is no doubt there is still space for all the automakers to grow in Pakistan. Despite the exuberant prices of locally produced vehicles, there is so much demand for new cars that either you have to wait months for the delivery of your car or if you want to buy it now, you have to pay a premium. Suzuki has halted the booking of new Alto just because it has been unable to fulfill the current orders on time. Foreign automakers would not be interested in Pakistan if they didn’t see the potential here. But as much as the government would like to bring them in, it cannot let them go free rein and charge customers whatever they like.
The government has been working towards creating more competition to lower the prices of vehicles, whether it is through opening imports, or offering relaxed terms and conditions to other potential companies who are interested in Pakistan as their next market. But it seems the government is willing to go to some extreme lengths to bring the carmakers under control. The legality of a price control board of any sorts will definitely be a hot debate as well and might even be contested in higher courts if car companies decide to reject the proposal.
But whatever the case, it is time something concrete is done to make the lives of auto consumers easier in Pakistan.