Inquiry into automakers’ bad practices hits roadblock

ISLAMABAD: An inquiry by the Competition Commission of Pakistan (CCP) into consumer exploitation by the automobile sector regarding premium payments (on-money), delayed deliveries, increased car prices after booking, etc has come to a standstill.

Sources in the commission told Dawn that the investigations have been hindered by a court order and non-cooperation of Honda Atlas Cars (Pakistan) Ltd, as the company has not responded to the request for information since November 2018.

From November 2018 to November 2022, the CCP wrote six letters to Honda Atlas Cars seeking information under the law but the company failed to fully cooperate with the commission.

However, the company filed a writ petition in the Lahore High Court (LHC) and obtained a stay order in January this year.

The LHC permitted CCP to proceed with the inquiry restraining it from passing a final order but Honda Atlas has refused to provide further information to the commission.

The CCP initiated the inquiry after reports of numerous consumer complaints through the PM Citizen Portal and it was noticed that car manufacturers – Honda, Toyota and Suzuki – increased prices of booked vehicles.

The sources in the commission confided that the leading manufacturers were also causing delays in vehicle delivery and raising prices even after customers made full or partial payments.

The CCP inquiry was related to alleged exploitation by authorised dealers by charging premiums (on money) for early delivery.

The objective of the CCP’s inquiry is to determine whether these practices distort competition.

The CCP has actively intervened in the automobile sector in the past to safeguard consumer interests and in 2015 the commission imposed heavy fines of Rs140 million on the Pakistan Automobile Manufacturers Authorised Dealers Association (Pamada) for exploiting consumers by manipulating the prices of their products and services.

In 2013, the CCP revised the terms and conditions outlined in the Provisional Booking Order (PBO) of carmakers.

As a result of this intervention, Toyota began accepting partial payments, marking a significant departure from previous practices and both Toyota and Suzuki willingly amended their conditions in response to the CCP’s regulatory influence.

Meanwhile, there the officials in Honda Atlas did not respond to the concerns raised by the CCP.