ISLAMABAD: The Competition Commission of Pakistan (CCP) has issued a letter to the automobile industry against consumer exploitation such as payment of insurance premiums (on-money), delays in vehicle delivery, and hike in vehicle prices after booking on full or partial payment. We are conducting an investigation.
Officials say the investigation is currently being hampered by court orders and non-cooperation by major automakers. The company has not responded to the Chinese Communist Party’s requests for information since the investigation began on November 29, 2018. From November 2018 to November 2022, the Chinese Communist Party wrote six letters requesting information based on the law, but the company was unable to fully cooperate with the Chinese Communist Party.
The company filed a writ petition in the Lahore High Court in January 2023 and obtained an injunction.
In January 2023, the Lahore High Court allowed the CCP to proceed with its investigation, but refrained from issuing a final order. However, the company completely ignored the court order and refused to provide further information.
The Chinese Communist Party launched an investigation after it noticed that automakers were raising prices on reserved vehicles. Numerous consumer complaints through the Prime Minister’s Portal prompted further investigation. These large manufacturers delayed vehicle deliveries or increased prices even after customers had made full or partial payments. Authorized dealers exploited customers by charging premiums (on-money) for early delivery. The Chinese Communist Party has expanded its investigation to other automakers entering the market.
The purpose of the Chinese Communist Party’s investigation is to determine whether these practices distort competition. However, the conclusion of the investigation will depend on the final decision of the Lahore High Court regarding the dismissal of the company’s suspension order. The case is scheduled to be heard in the first week of December 2023.
The matter is still under investigation, and there have been no adverse findings against any company by the Chinese Communist Party. I have no bias so far. Remedies in the event of an adverse order include appeal to the Competition Appeal Tribunal and the Supreme Court of Pakistan.
In a recent case involving ghee/edible oil manufacturers, the Supreme Court approved the Chinese Communist Party’s investigative and intelligence-gathering powers.
The Chinese Communist Party has actively intervened in the automobile sector to protect the interests of consumers. In 2015, the Chinese Communist Party imposed a hefty fine of 140 million rupees on the Pakistan Automobile Manufacturers and Authorized Dealers Association (Pamada). The action was taken after Pamada was found to have exploited consumers by manipulating the prices of products and services.
In 2013, the Chinese Communist Party played a decisive role in reshaping the consumer transaction landscape within the industry. Specifically, the CCP revised the terms and conditions outlined in the automaker’s Provisional Booking Order (PBO). As a result of this intervention, some companies began accepting partial payments, a significant departure from previous practice.
The development resembled a consent decree, as both automakers were willing to modify their terms in response to the Chinese Communist Party’s regulatory influence.
These proactive steps by the Chinese Communist Party confirm its commitment to promoting fair and transparent business practices in the auto industry, ultimately benefiting consumers. Given the variety of actors providing various products to automotive customers, the Chinese Communist Party relies on cooperation with courts to effectively play its role in protecting consumer interests. This partnership is critical to ensuring a strong regulatory framework that fosters healthy competition and protects consumer rights in the dynamic and competitive automotive market.
Copyright Business Recorder, 2023