Automakers React to State Bank’s Decision of 100% Cash Margins on CKD Imports

Automakers have responded to the criticism by State Bank of Pakistan on the subject of imposing 100 percent cash margins on completely knocked-down kits. In a letter sent to the SBP chief economist, PAMA (Pakistan Automotive Manufacturers Association) criticized the short term investment for imposing 100 percent cash margin requirement.

The letter stated that ‘including an industry in a certain regulatory measure on such grounds is quite unfair’. The Automotive Manufacturers Asssociation claimed that assemblers do not take full payment in advance. PAMA further added that assemblers are managing the vehicle booking on partial payment keeping in consideration with the Auto Policy 2016-2021.

The association said that three local assemblers are ensuring that the delivery time of vehicles does not exceed two months mark. They claimed that customers are compensated with -payment- mark up at the rate of Kibor plus 2 percent; if the vehicle delivery extends beyond two months.

PAMA has argued that the new requirements imposed by State Bank will increase the cost of business for local assembler and will end up giving an undue advantage to used car importers. The Automotive manufacturer’s association urged the State Bank to waive the 100 percent cash margin requirement for CKDs. On the contrary, H.M Shahzad, Chairman of APMDA (All Pakistan Motor Dealers Association) has remarked, ‘ Car assemblers are fleecing people by demanding advance payment while delaying the delivery of vehicles way past the committed dates. Reportedly, he has also remarked that local industry did not pass the impact of depreciating yen to consumers.


Notable Replies

  1. This claim by local auto manufacturers that ''they pay a premium to customers if vehicle delivery is delayed beyond 2 months'' is total nonsense and false. I myself booked a Honda Civic VTI Oriel in 2013 for my personal use. Got the same stupid letter at the time of booking that a premium will be paid if delivery exceeds beyond 2 months. I was promised delivery in 1.5 months max. And my vehicle got delivered after 4 months. And when I asked for premium, the Honda DriveIn Sales Manager Mr.Raheel started giving stupid excuses that company has not issued pay orders due to floods in Thailand which has delayed supply of parts. Here I ask, which floods in 2013? These local manufacturers and their dealerships are here only to fool customers and hoard money.

  2. Totally insane and stupid statement from the PAMA I booked Toyota Corolla gli on 11th agust 2015 and got my car delivered on 18th feb 2016 (after six months) they didn't given me any letter or premium of 2% now I booked Civic X Oriel on 2nd feb 2017 and tentative delivery date is 31st july they didn't given me any letter.

  3. You can demand compensation only if car is delivered after 60 days of full payment, they have found this loop hole and exploiting it.

    If you made full payment then you can seek compensation if they deliver after lapse of 60 days.

  4. Isi waja se maina new car Lenae ka irada khatam kar dia ha .aik mehngi gari aur oopar se 6 months ka wait warna phir own bharoe jo ke aik already expensive car ko mazeed mehanga kar detae ha .

  5. You are wrong in your interpretation .here I attach the article for your kind consideration .
    Which reads :" In its attempt to address a key issue plaguing the auto industry, the government has decided that payment made at the time of booking a vehicle should not be more than 50% of the total cost, while the price and delivery schedule – not exceeding two months – must be finalised then and there.

    A delay would result in the company offering a discounted price at Kibor plus 2% prevailing on the date of final delivery, a move aimed at shortening the timeframe of the process."

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