Delaying Delivery of Cars Will Now Result in Huge Penalties for Automakers

Delivery delays have become a common trait among automakers and a matter of great bother for car buyers all across Pakistan. The Government has finally caught wind of the issue and, as a part of the new auto policy, has decided to slap penalties on automakers who fail to deliver cars to the customers within two months of booking.

The said development was revealed yesterday by the additional secretary, Ministry of Industries and Production, as he was briefing the National Assembly Standing Committee on Industries and Production during a meeting that was chaired by Sajjad Hussain Turi. As per the report, the decision shall be made applicable from July 2021, following the upcoming budget.

The Engineering Development Board (EDB) also added during the meeting that the car companies that delay the delivery of vehicles beyond two months will have to pay a fine of 3 percent plus Kibor.

The fine percentage shall be that of what the customer has paid to the company for the vehicle, however, it wasn’t revealed if the percentage is that of the full vehicle value or just the booking amount.

The said step is reportedly intended to curb the “own-money” problem that persists in the Pakistani car market. The delivery delays are believed to be a means of exploitation for the auto dealers ad investors who charge a premium from the customers over the car’s original Manufacturer’s Suggested Retail Price (MSRP) for early delivery of the vehicle.

The committee members pointed out that currently, “own-money” is being charged between a range of Rs. 400,000 and Rs. 1 million. In case of purchase without paying the “own-money”, the customers have to sometimes wait well beyond the committed delivery times.

One of the names that were brought up by the participants of the meeting was Morris Garages (MG). The committee members pointed out that, as of late, the automaker has made it a habit to deliver the vehicles late to the customers.

They also discussed that the company is selling said vehicles in the market without ensuring the upkeep of spare-part stock to cater to the market needs, which is causing customers a great deal of distress.

It bears mentioning, though, that despite the aforementioned issues, MG’s popularity continues to stay strong, and with the recent development of a manufacturing plant in Lahore, the automaker is seemingly set to overcome the issue of delivery delays.

The said step is indeed a promising one from the government. The delivery delays and the menace of “own-money” have been the reasons for a toxic environment in the car market for a long time. The strict enforcement of the aforementioned clause is likely to finally solve the said problem.

Courtesy: Pro Pakistani

Leave a Comment

Your email address will not be published. Required fields are marked *