The Chairman of the Board of Investment (BOI) has announced that the Federal Government was keen to introduce at least one European brand of cars in Pakistan where the monopoly of three manufacturers has limited the choices of the consumers who are compelled to buy their product at unreasonably high prices. In this regard, the German ambassador in Pakistan stated during a press conference, that the world’s second largest automobile manufacturer from Germany, Volkswagen, has sent its representative as a member of a delegation currently visiting Pakistan to assess the feasibility of setting up a manufacturing plant in the country. In a market where the demand is much more than supply, the investors are exploiting the consumers by selling the vehicles in the open market at a significantly higher price than originally fixed.

There is no protection to the consumers against such exploitation. Locally made products do not meet with international quality standards as the current automobile policy does not protect the interest of the consumer at all. The absence of any provision in the policy to recall the inherently defective product further adds to the woes of the consumers. This principle has been an essential part of the manufacturers’ obligation all over the developed world. Sustainable Development Policy Institute (SDPI), an economic think tank, has justly demanded a new auto policy which is more consumer sensitive. Apart from mandatory recalling, it has suggested accelerated localization with an intention to bring down the car prices. The new policy should also bring down import duties and other unnecessary barriers which appear in almost every such initiative due to unabated corruption, resulting in running away of the investors from the country.

Undoubtedly, the expansion in the domestic auto sector would give more choices to the consumers, better quality, increase GDP and will generate more employment. The introduction of such a world renowned competitor in the market is likely to positively address these issues provided the bureaucracy is able to frame a policy facilitating the new investors and creating equal opportunity environment in this sector.