It looks as if the menace of ON/OWN money is being finally getting the sort of government attention it required. Taking advantage of the awfully delayed deliveries by carmakers, the OWN money (or premium) is actually the longstanding practice of forcing car buyers to pay more than the price of vehicles to get instant delivery.
According to reports, the government has now decided to establish a regulatory framework to keep a check on the auto industry players illegitimately charging premium from customers on the delivery of new vehicles. Reportedly car manufacturers have also agreed to blacklist the dealers involved in illegally demanding premium from car buyers on the delivery of new vehicles.
Prime Minister of Pakistan Mr Imran Khan has already constituted a committee consisting of the law minister, finance minister and an adviser. The committee will develop a regulatory framework including penal provisions, if required, within three weeks to tackle the illegal demand for premium by car dealers over and above the invoice price.
The committee while establishing the framework will focus on the capacity and production standards of vehicle manufacturers as well as vehicle safety standards. According to officials, the committee will submit its report to the cabinet for approval and compliance.
A high-level meeting was held on Monday chaired by the Adviser to Prime Minister on Commerce, Textile and Industry Abdul Razak Dawood, in which automakers and officials of the Engineering Development Board (EDB) were present. Automakers reached an agreement on discouraging the practice of demanding premium while ruled out their involvement in charging premium amount on the delivery of cars.
The meeting came in the wake of directives by the cabinet to initiate a crackdown on the carmakers charging premium in collusion with the dealers. As a result, both the car industry and government officials agreed to launch a crackdown on the dealers.
According to the Auto Policy 2016-21 which was introduced by the previous government, payment at the time of booking a vehicle should not be more than 50% of its total cost and the delivery of vehicles should be within two months. Also, the car assemblers will be bound to pay a price at Kibor plus 2% prevailing at the date of final delivery in case the delivery of cars to the consumers is delayed.
Full story: Tribune