Non-delivery of cars in two months: the government decides to penalize car manufacturers – business & finance

ISLAMABAD: The government has decided to penalize car manufacturers for non-delivery of vehicles to consumers within two months after booking orders in accordance with the new car policy.

This was said by the additional secretary of the Ministry of Industries and Production, during a presentation to the Standing Committee of the National Assembly on industries and production, which met on Monday under the chairmanship of Sajid Hussain Turi.

Officials from the Ministry of Industries and Production further said the decision would be finalized in the next budget with the new clause applicable from July 2021.

The meeting was also informed by officials of the Engineering Development Board (EDB) that according to policy, it was decided to impose a fine of three percent plus Kibor on automakers who delay deliveries.

The rate will be charged on the amount paid by the buyer.

It is about solving the problem of “clean money”.

The Managing Director (GM), EDB briefed the committee on the new entries in the automotive sector and their performance.

The Committee expressed concerns about the additional amounts being charged by dealers and the problems facing the general public as a result of the delay in delivery from Morris & Garage (MG).

The Committee unanimously decided that the Federal Revenue Council (FBR) could be invited to the next Committee meeting.

The Committee postponed the remainder of the agenda due to lack of time.

Committee members said that at present the “clean money” on different cars ranged from Rs 400,000 to Rs 1,000,000, claiming that car dealers and investors are involved in the practice and that they overcharge a car that consumers want to buy immediately.

It is above the actual price of a car. This is a common practice in the Pakistani auto industry, where car assemblers sometimes take months to deliver an order.

A buyer has to make partial payment to reserve a car that is delivered as late as six months, sometimes the relevant authorities have to resolve this serious issue.

Speaking of commercial imports of MG cars into the country, committee members raised serious questions, claiming that the importer has an agreement with the government to set up an MG car production plant in the country but nothing has happened. yet been made on earth.

They said that hundreds of MG cars have been imported but without ensuring the supply of spare parts.

Member committee Riazul Haq said the MG cars were allegedly imported under invoicing and the matter should be looked into by the Pakistan Competition Commission.

ED officials, responding to questions, said in an effort to provide cheap vehicles to consumers, the government has allowed a number of global players to set up their factories.

They further stated that to keep the environment clean, the government has also introduced policies on electric vehicles and hybrid vehicles, under which by 2030, around 30% of vehicles will be converted to environmentally friendly fuels. ‘environment.

Standing committee member Hamid Atiq Sarwar said no car dealer should be allowed to place an order for a car to sell with their own money. The car company must keep checks and balances because reservations will be made through them, he added.

The Director General (CEO) of the Privatization Commission (PC) briefed the Committee on the main features of the privatization of Pakistani Steel Mills (PSM) and its downsizing plan, including the total compensation policy.

The deputy secretary of the Ministry of Industry and Production informed that the pensions of PSM retirees had already been paid by the government.

He said that by the end of June, the government will issue an expression of interest announcement for investors to submit their proposals for the PSM revival.

The DG PC informed that the Cabinet Committee on Privatization (CCOP), at its meeting held on June 17, 2019, ordered the PC to immediately announce the recruitment of a transaction advisor for the Pakistan Steel Mills Committee ( PSMC) in order to bring together a party for the rebirth of the entity without transfer of full ownership.

The PC Board approved the initiation of the recruitment process for a Financial Advisor (FA) for the PSMC.

Committee members expressed serious concerns about the delay in the process of hiring the financial adviser and the obstacles to the privatization of PSMC from 2006 to 2021.

DG PC informed that 1,228 acres of land had been decided to allocate the rental base to the new branch but did not clarify the details of the land balance and the settlement of debts to be paid.

The chairman of the committee expressed his concern about the assessment of the said land.

He was of the opinion that the new valuation of the land should be carried out by the government on the market price.

The Committee also discussed that the government of Sindh could also be considered before finalizing the tendering process in this regard, in order to avoid any further delay regarding the relaunch of the MSP.

After extensive discussion, the Committee decided that all stakeholders of the MSP will be invited to the next meeting of the Committee.

The Committee further instructed the Secretary of the Ministry of Industry and Production to address the problems encountered for the security of the PSM; the secretary, immediately ordered PSM security chiefs to send a letter to the interior minister, the Sindh government and the Sindh Inspector General of Police.

Officials further said that an estimated $ 500 million is needed for the refurbishment of the PSM, which also includes the replacement of obsolete machinery.

They said PSM was to pay Rs 260 billion in debts to various entities, including the Sui Southern Gas Company (SSGC), the Water Board and the federal government.

Officials said local coal produced in Balochistan can be used in the PSM, and once the plant is reestablished, it can produce three million tons of steel.

Copyright Business Recorder, 2021

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