Auto Development Policy 2016-21, Dewan’s plans to return as an auto manufacturer, multiple car launches and FAW’s intent to produce V2 locally are just a handful of the headlines that point towards a bright future for Pakistan’s auto market. ADP 2016-21 implemented on 1st of July this year is a breakthrough policy which will monitor the current car manufacturers through stricter regulations governing standard safety features, quality and delivery times in addition to paving the way for more vehicle manufacturers in our country to increase competition.
Have a Look: Pakistan’s 2016 Honda Civic Officially Launched in a One of a Kind Way!
However, as with other policies affecting stakeholders of industry, ADP has faced consistent resistance. Just around last week, it was reported that two out of Pakistani auto industry’s big three i.e. Pak Suzuki and Toyota Indus had got a stay order from Sindh High Court to put ADP on hold. The main reason for attaining the stay order was to negotiate a longer time frame for attaching immobilizers and other safety equipment which were made mandatory in cars by ADP.
Also Read: Pak Suzuki Threatens To Move New Investments To Iran, Express Doubts Over Celerio Launch
Now the parliamentary panel behind the application of Auto Development Policy 2016-21 has taken notice of the untimely delivery of cars to customers and the long prevailing bane of car deliveries in Pakistan the “own” money.
According to a report by BR, on Tuesday, the parliamentary panel responsible for the enforcement of ADP has urged Ministry of Industries and Production to put an end to both the monopoly of the current local auto assemblers and “own money.” If you don’t already know what “own money” is? Here’s a one-liner; it is a premium charged mostly by dealerships with alleged conjunction with the manufacturers for immediate vehicle delivery.
Senator Kalsoom Parveen said that local assemblers give preference to the “profiteers” than to their actual customers in car deliveries. She went on to lay claim that the CEO of EDB has links with the dealers who generate extra cash by selling cars at higher rates when he failed to state the actual booking timings of cars to the Secretary of Industries. CEO of EDB in his defence said that Toyota and Suzuki are yet to present their shared agreements with the board, and once they receive the required documents from both the companies a comparison will follow.
Read More: Toyota and Honda are not Abiding by the new Auto Policy
Also, Senator Ateeq Muhammad Sheikh laid claim that local auto manufacturers are committed to the cartelization of the industry to generate higher profits by charging “own.” In addition to asking, the standing members of the committee to take issues related to delivery times of cars seriously, he added,
“I had expressed my concerns with respect to the Indus Motors which manufacture Toyota brand. There is general perception that they are above the law because they don’t accept directions from any department. I understand most of their matters. The inability of EDB is another matter. They fix the price on their own and increase prices on their own. On the other hand, they charge “own” money from the consumers for early or immediate delivery,”
Moreover, a member of the committee also came up with a rational argument by suggesting that tax filers should get prioritised deliveries of their cars over non-filers.
In a nutshell, it’s nice to find that the parliamentary panel, Ministry of Industries and Production and Engineering Development Board (EDB) along with others are committed to the timely enforcement of Auto Development Policy despite the rather expected agitation from the current local manufacturers.
Own money does not only exist in Pakistan but in the entire world where it is known as a drive away car
Yes but that’s through a legal channel own money in Pakistan is channelled through black market
Guestception!
Yeah but that is something very different. Here in Pakistan it’s a monopoly which forces most of the potential buyers to buy their desired car at a very high price. Whereas in other countries it’s only for those people who need the car urgently otherwise they don’t have to wait 4 months for their car.
Lol. The irony..
Drive Away Pricing is not “own money”.
There are 2 prices for cars in Australia for example…one is RRP (Recommended Retail Price), which is the price that includes the base price, any factory-added options and the GST. The other price is DAP (Drive Away Price) which is price at delivery, plus registration, stamp duty and insurance.
The DAP has no effect on the delivery time of the car, it’s just to give an idea to the customer what the net price will be to his pocket.
And cars are usually sold below RRP here for the record, dealers can negotiate with you out of their own profits. My colleague recently bought a Mazda6 (Mazda Atenza 2.2D)…its RRP is AU$47,000 and when DAP is calculated it’s about AU$50,400. But he got the car for $46,500 net, because the dealer discounted it from his own margin. He had to wait 4 months for delivery though because the car has to be freighted in from Japan.
DAP is not a premium…at least in Australia, DAP is just the showroom price of the car plus registration, stamp duty and insurance.
own money on the new civic 1.8 is 3 lacs while on Turbo it is 5 lacs. Absurd. Need to get rid of this shit
another article copy pasted directly from carspiritpk.
but Mr. Adan Ali will say that “It is a small industry so I and Sir Usman Ansari get the same idea the same day with same quotations as well from the same source.”
Not exactly. On-money = On-time money, investors order a greater number of cars they cannot use so many cars themselves, then they create artificial shortage of the cars and take money for themselves, resulting in harm to the manufacturer and customer both (this attitude is called a social vice).
If the money for quick delivery goes to the manufacturer, then it is similar to regular mail vs express mail example.