Automaker issued show-cause notice for ‘deceptive marketing’

ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued a show-cause notice to an automaker for deceptive marketing and misleading advertising of its sports utility vehicle (SUV), it said on Tuesday.

The notice was served for prima facie deceptive marketing “in violation of section 10 of the Competition Act 2010,” the CCP said in a statement. The company has been given 14 days to respond.

The CCP took a suo motu notice of the advertisements published in print media and on various social media platforms publicising the introductory price of Hyundai Tucson with a disclaimer for a limited period only.

“In these advertisements, though the introductory price was visibly printed in large font size, the disclaimer was not easily noticeable as it was printed much smaller font size,” the CCP said after the enquiry.

The CCP was also informed that initial booking period for Hyundai Tucson of Hyundai Nishat Motor with the introductory price was less than 24 hours, and then the price was raised by Rs200,000.

Within 24 hours of the initial booking, the company declared that all units of Tucson at the introductory price were booked and the introductory price list was removed from its website, Facebook, and Instagram pages, according to the CCP.

The CCP’s office of fair trade, in its enquiry, found that the position of the disclaimer in advertisement could potentially mislead the consumers.

“The advertisement left the overall impression that the company did not clearly indicate to consumers the period for which the introductory prices would apply, and the number of vehicles that were available at that price point, thereby, prima facie, violating provisions of section 10 of the Competition Act,” the CCP said.

CCP is mandated to ensure fair competition to protect consumers from deceptive marketing practices.

In the recent past, it had imposed Rs150 million fine on a company for deceptive marketing.

The Auto Policy 2016-21 persuaded Korean and Chinese automakers to venture into the country’s auto market. Competition in SUV category is surprisingly ramping up with Hyundai Tucson, Kia Sportage and DFSK Glory 580 currently attracting customers to their variants.

Analyst Fawad Bashir of Top Line Securities said Hyundai Nishat sold 1,600 units between August 2020 and January 2021.

Low interest rates are already encouraging consumers to own cars and that led to 18 percent increase in sales of passenger cars to 81,569 units in the first seven months of the current fiscal year.