Suppressing Competition: Local Carmakers Get Stay Order Against New Auto Policy

If you thought it was a matter of time before you could buy a car from a new automobile manufacturer, get ready to be shocked. Indus Motors (Toyota) and Pak Suzuki Motors have challenged the new auto policy by going to the Sindh High Court. The court has approved a stay order against the implementation of the auto policy.

Pak Suzuki Motors, Toyota Indus Motors and Honda Atlas Cars have had exclusive control over the Pakistani automobile market and they have been selling cars with poor quality while charging 50% more than what their cars cost around the world. With the stay order in their favor, it is clear that these automakers are still not ready to build technologically advanced cars at cheaper prices, even though they can afford to do it.

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The new auto policy also included guidelines on timely delivery of vehicles to customers, setup for the development and enforcement of safety regulations, pre-installation of immobilisers in all vehicles to prevent car theft and a product recall clause, similar to the rest of the world, which forces the car manufacturers to recall cars in case of manufacturing defects in the design. The new policy also required buyers to pay half the amount upfront instead of the full amount when booking a new car.

The new auto policy is key to breaking the monopoly that these car manufacturers have in Pakistan. It offers incentives to new comers and the others who had left the Pakistani market some years ago.

According to the officials, Toyota, Honda and Suzuki were to install immobilisers in their Corolla XLI, City, Cultus and Mehran cars. However, they have refused to do so arguing that they were given a very small amount of time and require up to one year for this task.

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Suzuki has argued that they are going to phase out Mehran cars that is why they cannot invest in immobilisers for the vehicle. But they would launch the feature in the new cars they release.

The car manufacturers were also forced to deliver cars within two months or offer discounts to the customers at the rate of Kibor plus 2% when delivering the vehicle. Clearly aimed at preventing long wait times. Previously, customers used to be charged extra at the time of delivery even after paying the full amount in advance, citing that the car’s price has been increased.

The new auto policy was aimed at making the automobile market more lucrative and offering a better customer experience to the buyers. However, the current automakers seem to be adamant that they wont change their ways any time soon and the Sindh court has sided with them.

He is the Editor at ProPakistani.