KARACHI  -  Iqbal Shah, chairman of the Pakistan Automobile Assemblers Dealers Association (PAMADA), has suggested that the additional registration tax on transfer of a new car within three months of purchase would help curb the menace of premiums. “Early delivery demands by customers encourage investors to exploit customers by offering vehicles on premium payments. If customers book their vehicles and secure delivery as per the schedule offered by companies, no premium will exist,” he said. 

He said that vehicles were not commodity items, which could be made and shelved. “They are manufactured against individual orders of the customers and the industry has taken various steps towards discouraging premiums such as refusing multiple bookings of vehicles on a single CNIC, displaying vehicle availability information at the dealership floors and on the company website. “We request the customers to book their vehicles only at the authorised dealerships and wait for the delivery of their vehicles as per the delivery date”, he said, adding that with customers’ support, the menace of premiums on car prices could be eliminated.  

He said that OEMs discouraged premiums and ran consumer education campaigns through advertisements and made available the vehicle availability information on their website. However, demand for immediate delivery from customers against actual delivery time continues to encourage investors to charge own money. He also mentioned that due to government’s efforts to improve the economy and the stimulus in the market from the China-Pakistan Economic Corridor (CPEC), domestically manufactured vehicles were in high demand. “Lead times on vehicle delivery arise whenever there is high demand and are a common phenomenon across the globe”, he said, referring to the almost 6 month waiting period on certain Suzuki variants in India. 

Speaking on capacity enhancement by various OEMs, Iqbal added that presently all automakers were operating at full capacity and resorting to production overtimes to meet demand besides working on increasing their capacity. The Auto Industry Policy 2016-2021 is attracting new entrants from all across the globe. Their entry in Pakistan will result in more choices for the consumers and encourage a healthy competition among various OEMS. “We are at a tipping point today, as we were back in 2007, when the industry was investing in capacity expansion. However, a sudden relaxation of used cars import policy adversely affected the market, resulting in closure of three plants. Therefore, in order to sustain the interest of global players in the Pakistan Auto Market, stability and consistency of policies is needed,” he said.