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Ministry of Law and Justice has given a clean chit to local car assemblers with respect to charging of on money (premium), sources close to Secretary Industries and Production told Business Recorder.

Sharing details with Business Recorder, the sources said the federal cabinet, in its decision on April 2, 2019 while ratifying the decisions taken by the Economic Coordination Committee (ECC) of the Cabinet held on March 20, 2019 gave the following directions: "Law Minister, Minister Finance and Advisor to Prime Minister on Commerce and Industry will develop a regulatory framework including penal provisions, if required, with three weeks to check the illegal practice of charging car premiums by car dealers from the genuine buyers; over and above the invoice price of the vehicle. In doing so, capacity and production standards of different car manufacturers and vehicle safety standards may be focused. The decision about this issue shall be brought for the information of the Cabinet after doing the needful".

In pursuance of the direction of the Cabinet, the Minister for Law and Justice and Advisor to Prime Minister for Commerce and Industry held meetings with the concerned stakeholders and car manufactures operating in Pakistan i.e. M/s Suzuki Motors Co. Ltd, M/s Indus Motor Company Ltd and Ms/ Honda Atlas Cars (Pakistan) Ltd to understand the gravity of the issue of charging illegal premiums by the car dealers.

The response backed by statistical data revealed monthly booking along with delivery status and the existing inventories for each model manufactured by car manufacturers. As per the car manufacturers, most of their vehicles are available within 60 day period, hence the practice of charging illegal car premiums by car dealers is not correct as presumed in charging late delivery charges at Kibor + 2 per cent to their customers.

All the car manufacturers have given a certificate that they are not charging any car premiums and all necessary administrative and legal action shall be taken against car dealers found to be involved in charging any money over and above invoiced amount for booked vehicles.

Ministry of Industries and Production is responsible for automobile manufacturing policy and its allied operational matters. They have carried out an extensive research on the issue of premium in consultation with car manufacturers and informed Law Division that in their opinion there is no chaotic situation in the market in terms of delivery of vehicles. The situation will significantly improve after start of manufacturing operations by new entrants. Finance Division has endorsed the view of Ministry of Industries and Production.

After examining all the aspects of this issue, Ministry of Law and Justice maintained that for the time being no legislative intervention is required and matter may be disposed of requiring no further action.

Copyright Business Recorder, 2019

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I did graduation from the Government Murray College Sialkot and MSc in Psychology from the University of Punjab. I am in journalism since 1990. I worked in Daily Nawa-i-Waqt as sub editor and staff reporter in Daily Pakistan and Daily Din prior to joining Daily Business Recorder. I have been associated with this newspaper since 2000 as staff reporter. Energy Sector, Commerce / Trade and Industries are key areas of my interest. I have also the credit of exposing number of scams like Rental Power Plants (RPPs), LNG, sugar import, etc.