Surging prices of vehicles

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IN the backdrop of widespread concern among customers about unending rise in prices of locally manufactured cars and other vehicles, the announcement of Minister for Science and Technology Fawad Chaudhry that the prices would come down soon is music to the ears of the people. He acknowledged that the prices of vehicles have increased immensely but hoped that approval of the Electric Vehicle Policy by the Economic Coordination Committee of the Cabinet (ECC) would end the monopoly of car manufacturers in Pakistan.
Cars have become more expensive in Pakistan mainly due to lack of proper policy and vigilance by respective ministries and institutions which miserably failed to implement agreements struck with almost all companies that did not pay heed to their commitments to go for 100% indigenization. After decades, some companies have not opted for transfer of technology and are merely acting as assemblers which mean not only continued wastage of hard-earned foreign exchange but also inflated cost of imports due to over-invoicing and a multitude of taxes. The situation became more complicated during the last one year when the Rupee was allowed to shed its worth in a wholesale manner and taxes were increased on imports of parts and raw material besides a decision of the government to impose a ban on import of used cars, which benefited the car mafia. It is also regrettable that the auto sector continues to increase prices of different brands of cars despite steep fall in interest rates by the State Bank of Pakistan and some stability in exchange rate. Customers are also weary that on the one hand the prices are being increased frequently but on the other hand there is no focus on improving quality or adding facilities that have become a standard in other countries. Therefore, mere approval of EV policy is unlikely to bring about a change for the better until and unless all factors that attribute to price increase are addressed effectively and manufacturers are made to go for a total deletion programme and greater emphasis on quality/research and development.