The Japanese Yen might have declined but Pakistan car-makers refuse to bring down their prices.
According to a senior government official, the Engineering Development Board (EDB) wrote letters to three key players of this industry to reduce down auto-prices accordingly.
When compared to the Pakistani Rupee in the open market, the Japanese Yen has lost 5 pc of its value since this year’s start.
But automakers argue that the government has been collecting 33 pc in taxes and the cost of production is still at 33 pc with a 33 pc profit hence car prices can’t be reduced.
The matter has been sent to Competition Commission of Pakistan by the EDB since it has noticed the increase in prices as well as slow delivery of the vehicles in order to earn extra money on customer deposits.
EDB told their officials of their separate letters to the automakers regarding the Yen decline and no cost reduction issue, EDB has separately addresses the chief executive of one of the companies informing that they had received complaints regarding them maintaining slower delivery to earn more on customer deposits.
This company takes about four to five months to deliver the vehicle which is quite unjustified. Hence, a copy for immediate reaction has been sent to the CCP.
Manufacturers have already been seen as providing low quality of locally-made cars, discouraging imported car usage in their new auto policy and yielding high prices of autos, due to which the Ministry of Commerce is already in due consideration.
Ministry officials have reported that the quality of these cars is deteriorating day by day and the quality of even imported used cars was better than this. Hence, more preference is being given to the same as compared.
Despite receiving auto-incentives from the government, the auto industry hasn’t flourished at all. Hence customers have been forced to pay high amounts as reported by the Federal Board of Revenue (FBR).
The new auto-policy has failed to be unveiled over the year, but the government is now offering limited incentives to new auto entrants so that prices might come down to new competition in the market.
According to officials there also has been pressure on Pakistan to offer incentives for the existing auto industries in the new auto-policy.
However, even little response by any auto-maker over this stance has not been received yet.