Indus Motor Corporation and Pak Suzuki Motor Company have challenged the new auto policy and got a stay order from the Sindh High Court against its implementation, indicating they are not immediately inclined towards offering technologically improved and cheaper vehicles.
Pak Suzuki Motor – the Pakistan arm of Japanese car maker Suzuki – has a monopoly in the small car segment while the market for bigger-engine vehicles is split mostly between Honda Atlas Cars and Indus Motors, the makers of Toyota Corolla.
The new auto policy, besides giving guidelines on timely delivery to customers, calls for the development and enforcement of safety regulations, compulsory installation of immobilizers in vehicles to reduce theft and putting in place a product recall system in line with global practices.
The policy offers some incentives to new entrants for breaking the monopoly of existing car manufacturers. Consumer welfare is a key element of the policy announced by the government in March earlier this year. According to officials, Indus Motor was to install immobilizers in its XLI (basic) variants, Suzuki in Cultus and Mehran models and Honda Atlas Cars in the City variant.
However, the car makers have refused to install the immobilizers immediately, arguing it is not possible for them to complete the task in a short time. They require six months to one year as vehicle engines need to be changed for putting in place the anti-theft device.
“We need three to five months to receive the delivery of car engines and after that it will be possible for us to install the immobilizers,” the car makers told the government, adding they would be able to install the device in new car models.
According to the officials, the Suzuki management told the government that they were planning to replace Mehran cars with some other model, therefore, the immobilizers could not be made part of this model. However, the company agreed that it would introduce the immobilizers in the new models.
In an attempt to address complaints of delay in the delivery of locally assembled vehicles, the government has decided that initial payment at the time of booking should not be more than 50% of the cost of vehicle and the price and delivery schedule, not exceeding two months, must be finalized at that time.
In case of delay, the company will be required to offer a discount at the rate of Kibor plus 2% on the date of delivery, a move aimed at shortening the time period.
Before the announcement of the policy, buyers were forced to pay a substantial amount, sometimes 100% of the total cost, for booking vehicles and then wait for a long time before delivery. If the price escalated in the meantime, the consumers were also required to pay the extra amount on the delivery date. This had helped the black market flourish where consumers, looking for prompt delivery, were forced to pay a premium.
The new auto policy carries varying measures aimed at safeguarding the interest of consumers. However it is sad that the local automakers, instead of focusing on improving, are giving a strong hint that they are not willing to change their practices, while the court issuing the ‘stay order’ in their favor.