Automobile sector made Rs 170b undocumented payments as ‘own’

30
Islamabad

The automobile sector of Pakistan made undocumented transactions worth Rs 150 billion to Rs 170 billion during last five years under the head of additional charges, also known as car own, paid to the car dealers to get an immediate delivery.

Pakistan Institute of Development Economics (PIDE) Islamabad, in its research, revealed that annually, around 80 to 90 percent of passenger vehicles are sold at “own” which means at least Rs 150-170 billion has been paid as own on cars in the last five years.
“These transactions remain undocumented.

The own money is premium charged over and above the price of vehicles by dealers in exchange for immediate delivery of cars due to shortage existing in the market,” according to the PIDE research report by Senior Research Economist Dr. Usman Qadir and Staff Economist Mohammad Shaaf Najib.

It said only three major players assemble a handful of automobiles in Pakistan including Honda, Indus Motors and Pak Suzuki Motors, with new entrants such as Kia, Hyundai, MG, Changan and Proton yet to make their mark.

The researchers observed that the In the early 2000s, when car sales in Pakistan rose sharply, aided by the banks’ introduction of car financing services, the demand and supply gap widened.

The constant gap in demand and supply of vehicles in Pakistan had given birth to a phenomenon of car own.

The number of buyers increased rapidly, while vehicle production capacities did not significantly increase to match this rise in demand, resulting in an increased waiting period for the delivery after booking the vehicle. —APP

Previous articlePresident upholds Banking Mohtasib’s decision
Next articleActing CG underscores need to conclude Pak-Thai FTA to make trade ‘balanced’