Senate Committee Wants Buyers Safe from Car Price Hikes
The Senate standing committee on Industries and Production comes with a recommendation to protect customers from paying price differentials as the consequence of manufacturers increasing the price.
The committee chaired by Senator Khalida Ateeb wanted to protect buyers from making additional payments. Meaning the consumers should not pay an extra amount while receiving their vehicle when they have already made the complete payment for their car.
It was also among the committee recommendations that customers should be spared of price hikes laced with justification narrating domestic or economic dynamics, mainly dollar appreciation against the Rupee.
The Response
On the other hand, the automobile sector expressed serious reservations over the committee’s recommendations – carries a different stance on the prevalent issue.
Abdul Waheed Khan, Director General of the Pakistan Automotive Manufacturers Association (PAMA), stated, “The Senate Standing Committee can pay the difference then.” “If the US Dollar, or whatever currency in which the imports are denominated, is fluctuating so widely, then companies should not be required to pay from their pocket,” he added.
Concerning the late deliveries of vehicles, Khan blamed the import curbs inflicted by the State Bank of Pakistan. It is related to mention that the recommendations from the Senate standing committee came after several sessions on the matter.
Price And Interest Rate Hikes Affect Car Financing
Where Indelicate handling of economic charts has resulted in a back-to-back increase in car prices, non-issuance of letters of credit (LCs) from the State bank of Pakistan, and loan restrictions has made the matter worse.
Price hikes and mounting interest rates have affected car financing – observed a slight down of two percent (MoM), came in at Rs. 361 billion last month. In comparison, year-on-year auto financing surged by 15 percent in the face of recovery recorded after COVID-19.
A report has revealed that unloading cumulative price hikes, burgeoning interest rates, and the restriction imposed on the loan process have dropped the car demand, which in turn lowered sales.
Market Analysts have reported that State bank’s restrictive measures, booking suspensions, and long delays in vehicle delivery will slow auto financing.