The government is considering taking legal measures against local automakers.
  Sep 02, 2023      

The government is considering taking legal measures against local automakers.

The government has finally been irritated by the government's regular price increases on locally produced autos. The auto industry regulator Engineering Development Board (EDB) has written a notice to vehicle assemblers, requesting that they discuss their cost structure and justify pricing increases at a meeting on May 10, 2022.

Asim Ayaz, EDB's General Manager Policy, stated in an email to auto assemblers:

"The government is highly concerned and has taken a very strong stance on local automakers' repeated price rises. This scenario is plainly intolerable, and the government may consider taking regulatory action, including price fixing under the 1977 Price Control Prevention of Profiteering and Hoarding Act. As a result, by May 7, 2022, you must publish your cost structure and provide/justify any recent pricing increases. You are also advised to assure your attendance at the EDB Committee Room on May 10, 2022 for the topic meeting."

Indus Motor Company (IMC), Honda Atlas, Pak Suzuki Motor Company, Lucky Motor Corporation, Al Haj Automotive, United Motors, Regal Automobile Industries, Master Changan Motors, Hyundai Nishat Motor, and Sazgar Engineering Works have also received the letter.

This isn't the first time automakers have been questioned about their repeated price hikes. Last year, the Ministry of Industries and Production sent assemblers a similar letter, asking them to justify price increases and produce costing structures, failing which, unilateral price fixing actions would be required. According to the letter, the government may have no choice but to take regulatory action, such as price fixing under the 1977 Price Control and Prevention of Profiteering and Hoarding Act.

In response, IMC CEO Ali Asghar Jamali stated that they will meet with EDB and explain the reasons for the price hike, but that vehicle assemblers would not share their cost structures since it was confidential information. According to Ali Asad Hameed, CEO of Sazgar Engineering Works, it's not just the rise in the dollar; raw material prices are also rising, requiring our principals to raise prices, despite the fact that the dollar is one of the most important elements.

It's worth noting that automobile prices are currently being changed every 35 days, with three big price changes published in only four months since the start of 2022. In the year 2022, about a 20% price rise has already been seen.