In a constraint automobile market coupled with long delivery time of cars consumers in Pakistan have a tough life, and the government has added salt to injury by issuing SRO 1067(1)/2017. According to one of SRO’s condition:
“In case of import of vehicle under baggage, transfer of residence or gift schemes, the remittance for payment of duties and taxes should originate from the account of Pakistani national sending the vehicle from abroad.” In layman terms the import of the car will become difficult; however, media outlets are now reporting that FBR has exempted car imports between December 4, 2017, to January 9, 2018—meaning the stranded 7,000 cars at the port will be given clearance. But after that what would happen as it is a temporary relief, the government will again implement the SRO in full power, and the oncoming vehicles will again be stuck at the port. According to the government, the new SRO has been issued to curb the trade deficit of the country.
In my opinion, it is a good step by the government; but the authorities should find a way to resolve the issue as the production of new cars in the country is very low. Similarly, car penetration stands at as low as 13 vehicles per 1000 persons that is why an imported car is the only solution the local consumers have right now. Furthermore, the government should pressurise the existing automakers to enhance their production of vehicles to cater the need of consumers. It is to be noted here that as the government issued new SROs, the local automakers soared the prices of their cars to take advantage from buyers. According to local automakers, they jacked up the prices due to the devaluation of Rupee. However, the hike in prices by the companies is unfair; they shouldn’t have hiked the prices as much as they did.
People have to wait for 5 to 6 months to get their hands on the car after the date of booking. So, to avoid this awkwardness people usually pay a premium to get the car abruptly. The malicious and malafide premium practice has been there in the market for a long time now. Basically, in simple terms, you are being looted knowingly, and as a matter of fact, you cannot do anything to make it stop. However, IMC Toyota did take some initiatives to clean off this malicious premium scheme from the market.
The company cancelled around 1300 booked cars and also suspended and fined its dealerships. Moreover, IMC is also refunding the money whose order has been cancelled by its recent actions. It is a good step which Toyota has taken; but why the customers are suffering, instead of paying them back the company should give them the car. They ordered cars legally, so the company should provide some leverage to them by delivering cars at the announced delivery date.
Moreover, despite these stern actions taken by IMC, many are still selling Toyota cars on premium and much to my amazement, the premium/ON/Own on these cars is at an all-time high. Same is the case with the cars made by other manufacturers; their premium has also soared. And if the government seriously doesn’t do anything regarding the SRO 1067(1), it is safe to assume that the premium on cars will soar even further, making the lives of local buyers even more difficult.
It is pertinent to mention here, that as we researched through the market to gain knowledge regarding premium, we stumbled upon this revelation that if someone books the car in this particular time, the booking time is 5-8 months. Furthermore, the car bookings suspended will begin after 2 to 3 months. Most of the bookings that were halted belong to Toyota. Only two vehicles of Toyota – Altis 1.8 and Fortuner are available now on a booking period of 7 – 8 months.
Following is an accumulation of booking times and premium rates: