Honda dealers attempt to extort money from customers using price increase as a gimmick

The US Dollar has been rising exponentially in the past few weeks. As the rupee’s buying power continues to decrease, the prices keep going up including cars. 

The automobile market was already suffering from declining sales when the government decided to impose Federal Excise Duty (FED) on locally manufactured and imported cars. This will invariably further increase the prices, bringing a question mark on the future forecast of the local automobile market.  

While car makers are hiking prices to compensate for vehicle costs going up due to the dollar rate and inflation, some of their dealers are trying to earn money through cheap gimmicks.  

Recently, Honda increased the price of its vehicles by up to Rs. 400,000 with effect from 24th June. With these vehicle prices surging, the rate of Honda Civic 1.8 has also gone up to Rs.41 lac. All the new orders are to be placed under a new invoice. However, some dealers are trying to entice customers by offering them cars on the old invoice. 

ALLEGATIONS

PakWheels.com has received at least two complaints from disgruntled Honda customers. In the first case, a potential customer Mr. Atif Sukhera approached Honda Point Lahore to buy Honda Civic 1.8. He was offered to buy the car on the old invoice, which is PKR 37 lac 63 thousand in the form of a Pay Order made in the name of Honda Atlas. However, when he visited the dealership for delivery of the vehicle, he was asked to pay an additional PKR 1 lac 80 thousand in cash as Premium or ON money. 

In the second incident, the potential customer who chooses to remain anonymous approached Honda City Sales in Lahore to buy Honda Civic 1.8. He, too, was offered the car on the old invoice, which is PKR 36 lac 13 thousand. However, the dealer demanded one lac more on top of the invoice amount in the form of Pay Order made in the name of Honda Atlas.

In both cases, the potential buyers refused to purchase cars. On the face of it, it seems these two Honda dealers were demanding Premium or ON money from their customers since the prices of cars continue to go up and these dealerships were trying to take undue advantage of this situation at the expense of the customer.

As a leading advocate of consumers rights, PakWheels.com following good journalistic practices contacted Honda Atlas as well as the two dealerships alleged to have been involved in unethical business practices.

Other Side of the Coin

Both dealerships confirmed that they have been demanding more money on the old invoice. According to them, customers have the choice to pay 36 lac 13 thousand on the old invoice or 41 lac on the new invoice. This gimmick of tricking customers into paying the amount that they want, rather than what is actually set by Honda Atlas is blatant manipulation of customers.

When PakWheels.com contacted Honda Atlas, they denied giving any sort of permission for unethical business practices to their dealers.   

“Honda Atlas cars always strongly discourage Premium & Discounts,” Mr. Mumtaz Ahmed of Honda Atlas Cars said, “For customer convenience, we have displayed Honda Policy of “NO PREMIUM & NO Discount” at all customer dealing area of our 3S dealers. No Honda dealer is allowed to charge any sort of premium with customers and if we get any evidence strong disciplinary actions will be taken. The complaint numbers are also mentioned for customer convenience.”

Regarding the anonymous customer’s complaint, Honda Atlas said: “The dealer asked the correct price, 100K was the price increase for the customers purchased vehicles from 24^th June ~29th June. No dealer can ask for any premium with the DD in favour of OEM.”

PakWheels.com Says…

By indulging in such unethical business practices, these dealerships are not only tarnishing their own reputation but also the image of Honda Atlas. Honda must consider the consequences, and take action against such dealers.

To any customer who has faced a similar experience, we would urge you to contact the Competition Commission of Pakistan (CCP) and other concerned departments to report the incident.