Is Govt Setting a Body to Fix Car Prices?
The high car prices are one of the gravest issues for the auto market, car consumers and the current government. In the last couple of years, the prices have shot up repeatedly in Pakistan. To control it, the government reduced the taxes under the new Auto Policy (2021-2026), playing its role in an effort to reduce prices. After the reduction, the car manufacturers assured the government that they would not increase the prices again, as per media reports.
However, they did not meet the commitment and increased the prices of cars, which reportedly irked the Ministry of Industries and Production. Although the companies have given reasons, including the devaluation of the Pakistani rupee, high freight and shipment rates, and ever-increasing prices of materials, however, it was not as per their assurance with the government.
The media also reported that the government officials are not pleased with the ‘ON Money’ culture. Despite the government’s steps, the culture is still thriving in the market.
Govt Seeking Proposal
The reports further suggested that the proposal for setting up a price regulatory board was recently floated. The body will have representatives from the ministry of industries, EDB and the auto industry to decide on revisions in the prices of cars. The sources have claimed that the ministry of industries has asked relevant officials to seek input from Law Division on the proposal.
However, Engineering Development Board (EDB) has opposed establishing such a body, as per media reports. At present, the EBD is the regulator of domestic industries, including automakers.
Car Prices and Local Market
After the reduction of taxes in July, car prices came down. This was celebrated as a massive milestone as this happened for the first time. However, the happiness didn’t last long as prices went up again, further increasing the burden on the public. The establishment of a regulatory body will be a positive sign for the consumers, however, currently, it is just a proposal, and we have to wait and see whether it will become a reality or not.
What do you think about this proposal? Do you think it will help in controlling car prices in Pakistan? Share your thoughts in the comments section.
What Do We Think?
We think, a body or not, the government will not be able to control prices. The major reason? the car assembling is a private business and government cannot force the companies to set prices. Yes, it has reduced taxes and duties but cannot pressure the companies.