Local carmakers draw fire over low standards, blown-up prices

ISLAMABAD: The consumers of locally assembled and importers of used cars on Thursday criticised manufacturers, holding them responsible for lower quality, inflated prices, delayed delivery, and premiums despite getting a tax relief of over Rs 55 billion in the last budget.

“The local auto industry is consistently making all out efforts to curb premiums and has invested approximately $140 million in capacity enhancement with a major recommendation to introduce ‘transfer tax’ on transfer of vehicles,” Ali Asghar Jamali, CEO Indus Motor Company, said at an open hearing organised by Competition Commission of Pakistan (CCP) to give stakeholders a chance to have their say.

Jamali represented the auto industry of Pakistan along with officials from Atlas Honda and Pak Suzuki Motors.

Vadiya Khalil chairperson CCP asked the local manufacturers to explain steps taken to improve the quality of the locally manufactured vehicles and address complaints of consumers on quality and safety features.

The CCP members also objected the warranty standards of the local cars and questioned the manufacturers whether or not these standards have been complied with, as the commission has received complaints on warranty standards.

The representatives of the commercial vehicles manufacturers from Japan and importers of old and used cars pleaded their cases with the argument that the government must provide ample opportunities to allow liberal imports of vehicles.

“We can reduce the cost of imported vehicles up to the price of local [Suzuki] Mehran cars, if we are given concessions and relaxations in import policy,” an auto industry representative said.

The representative further objected that the heavy taxation and restricted import regime are major causes of limited import of cars in the country.

To this Federal Board of Revenue’s (FBR) secretary customs tariff responded that there were no overnight changes in duties and taxes on the import of vehicles. “The RDs (regulatory duties) have been imposed on only high engine capacity vehicles and there is no change in customs duty structure on the import of such vehicles,” the tax official said.

Replying to another query, the FRB official said all parts of vehicles available in the local market cannot be declared as smuggled or acquired through illegal channels as a large number of cars was imported under documented channels of WEBOC customs clearance system.