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Govt should devise mechanism to regulate automotive sector

LAHORE (INP): As Pakistan Automotive Development Policy (ADP) 2016-2021 is going to expire next year while the new Auto Policy is in final process, the Pakistan Industrial and Traders Association Front (PIAF) has appealed the government to devise some mechanism to regulate the automotive sector in view of the quality as well as the prices in consultation with all stakeholders including the industry as well as the consumers.

Chairman PIAF Mian Nauman Kabir said on Friday that local manufactures revise their cars prices whenever they desire and that too without getting due approval from any authority, which affect the common people badly. The prices of all types of cars have skyrocketed along with illegal cost of premium or ‘on money’ and there is no authority to check this unlawful act of the auto dealers and car assemblers in the country.

The Engineering Development Board (EDB), which is the apex government body under the Ministry of Industries & Production, entrusted to strengthen and regulate engineering base in Pakistan, will have to devise some rules and regulations to benefit the consumers along with securing the interest of the auto assemblers in the upcoming auto policy, he said.

PIAF also suggests the Senate Standing Committee on Industries and Production to take the notice of exorbitant and ever-soaring prices of cars in Pakistan along with illegal practice of charging ‘on money’ or premium, he added.

The Senate Standing Committee on Industries and Production, the Engineering Development Board, FBR, Pakistan Automotive Manufacturers Association and major Consumers Welfare Associations should sit together and finalize some mechanism to bring down the prices of automobiles in line with the rates of international market, by revising profit margins and decreasing taxes and duties in the larger interest of the public.

Mian Nauman Kabir said that the rates of cars were mainly affected by the sharp depreciation of rupee against the US dollar. However, the local currency has now stabilized and gained some value for the last few months but of no effect on the car prices. The automakers are still busy revising the car prices almost every month for no apparently justified reason. Moreover, there are no quality standards set by any government regulatory body in the country for producing cars.

The government should open commercial imports of used vehicles to provide the masses with more choices, he demanded. The local industry has given nothing but price shocks on higher localization claims, he said.

The PIAF Chairman said that the auto sector might collapse if the current trend continues. The government can help the sector by bringing down duties and taxes on cars. Cuts in duties and taxes would bring down prices and attract some customers to keep industries rolling.

The rising prices of locally-assembled cars usually push buyers towards used imported cars. But the situation is precarious now as the prices of both used imported cars and locally assembled ones are on the rise, he said.

In addition, the government also needs to introduce regulations to discourage investors from demanding premiums. Consumers also need to display some resistance to premium. They should book their vehicles, take delivery on schedule and say no to premium, he added.

The federal government and local car manufacturers should take up the issue of increasing car prices in the country and incorporate this issue too in the new automotive policy. He said that effect of the continued hike in prices of vehicles is now visible, causing a slowdown in car sales, which have declined sharply.

Mian Nauman Kabir said that the time has come for the existing players to make prompt investment in capacity expansion, improve localization and introduce new models, he said, adding that an increase in production will boost tax revenue and create jobs.

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