After receiving various complaints about high prices of vehicles, hefty advance payments, delay in delivery of passenger vehicles, charging of premiums for on-spot delivery, and no facility to recall the vehicles, the Competition Commission of Pakistan (CCP) has initiated an enquiry against two dominant local car assemblers, including Pak Suzuki Motor Company Limited.
A CCP spokesman said the commission has initiated an inquiry under Section 37 of the Competition Act, 2010 into the possible anti-competitive behaviour of the two dominant car manufacturers in the automobile sector, which is, prima facie, responsible for putting unreasonable financial burden on the consumers of passenger vehicles without giving them value for money. The inquiry will initially cover the market for consumer vehicles ranging between the engine capacity of 800 cc to 1299 cc.
CCP has also noticed and it has been brought to its knowledge in a meeting with the Engineering Development Board that neither manufacturer appear to be facilitating the option of recall of vehicles, which, prima facie, indicates a lack of a healthy competition in the market. Due to the dominant position Suzuki and other local car manufacturer, the consumers have very few options to consider. The investigation by CCP will determine whether the behaviour by Suzuki constitutes the imposition of unfair trading conditions in violation of Section 3 of the Competition Act.
One of the major concerns shared with CCP is the consistent upward trend in the in the prices of cars without an upgradation of the technology. Although the prices of locally assembled cars have increased manifolds over the past years, the manufacturers have failed to take significant measures to upgrade the engines and add safety and other features corresponding the increase in prices.
Similarly, one of the gravest predicaments faced by the consumers of new cars is the requirement of hefty advance payments for placing the order to book a car. In this regard, it has been observed that Suzuki requires full advance payment despite a non-negotiable delay in the delivery of its vehicles. The advance payment requirement on one hand rids the customers of the opportunity to earn profits on their cash, and on the other hand allows the manufactures to accrue that profit for themselves.
The delay in delivery of vehicles is another burning issue. Despite having ample access capacity of the dominant manufacturers, the delay is questionable particularly in the case of those models that have not undergone considerable changes and whose demand forecast can be made with relative certainty. As is the case of advance payments, the delay in delivery of vehicles is linked to the benefits forgone by the consumers.
