Aren't "new vehicle launch ceremonies" in Pakistan becoming too routine? When an automaker releases a car at a given price, consumers scramble to reserve one in the wee hours of the first day, only to discover that all available units have been reserved. Customers receive delivery dates after a few weeks, or even after a few months; otherwise, they must pay extra money or a premium for faster deliveries.
Assemblers then reduce the output of cars while blaming supply-chain problems, which has turned out to be a gift in disguise for these businesses. Assemblers then announce a price modification that is applied to all earlier reservations as a result of rising demand, delays that multiply the premium money by 10, and increased premium prices. Not to add that the partial payments received from millions of clients (numbering in the thousands) have already generated enormous bank profits for them.
Customers will be forced to pay the price difference by the time the delivery date comes around, and they will wind up shelling out far more money than the real quoted price of the automobile at the time of introduction. And what's this? With the debut of the new HR-V in Pakistan, the same problem has recently occurred once again.
Honda Atlas decided to launch the crossover in Pakistan and committed to delivering the early-booked units between November 2022 and January 2023 despite the import restrictions imposed by the State Bank and the global supply-chain issues that have slowed the production of the new HR-V in Japan. As a result, many markets, including the Philippines, have advised customers to switch to other vehicles instead of "waiting" for the HR-V.
Customers were told that the delivery date has been delayed to June 2023 as soon as the order was placed. Many buyers have expressed their discontent with Honda's conduct on social media. If the firm was unable to deliver the automobile, there was no need to "launch" it and raise a significant sum of money through bookings, according to many customers.
Customers will continue to suffer every time a new car is "released" in the nation since there is no government oversight of or limitations on the auto industry. The introduction of the "escrow" system, which will make the booking process much more visible, can be considered by the government authorities if they are serious about reversing this scenario and putting something in place that helps the end users.
Escrow is a legal term that refers to a financial arrangement in which a third party holds an asset or money on behalf of two other parties who are carrying out a transaction. The escrow agent often oversees escrow accounts. Only after the completion of defined contractual requirements does the agent release the cash. Escrow can be used to hold several types of assets, including cash and securities.
Before money or assets are transferred from one party to another in a transaction, a neutral third party is said to be keeping them in escrow.
Until both the buyer and the seller have complied with the terms of the contract, the third party keeps the money.
Escrow is used to buy vehicles (usually used ones) in numerous marketplaces throughout the world in addition to buying many valuable commodities like property, gold, etc.
Think about a business that sells cars. When the car is delivered to the client and the firm is assured it will be paid, the latter is required. Only if the car is delivered in decent condition will the customer be willing to pay for it. The buyer can ask an agent to hold the money in escrow with instructions to release it to the business once the products are received in an acceptable condition. Both parties are safeguarded in this way, and the deal may go through.
Similarly, employing auto escrow may be used in some circumstances to make a partial payment or deposit. One reason for doing this is to hold the automobile for a future buyer. Before delivery, the remaining balance of the purchase price is added to the escrow account. The customer receives their deposit back, though, if they decide not to purchase the vehicle. There is a fee associated with employing an escrow service, but it is little in comparison to the additional costs that clients presently face.
It's like getting two things done at once. Assemblers will receive bookings with confidence, but they are not permitted to utilize those monies to make unfair bank gains. As they won't be able to receive escrow fees for a bad car, it will also encourage them to practice rigorous quality control. Second, since only real purchasers will be using the escrow technique, it will also remove investors and hoarders from the picture. Using a transparent escrow service would disclose the identity of these hoarders, something they would never want to do because they are often disguised from the documents.
However, we are aware that these measures won't be put into action since they call on the government to ring the big cat. Anything that could appear to be far away.