ISLAMABAD-The Competition Commission of Pakistan (CCP) is conducting an enquiry in the automobile sector against consumer exploitation, including premium payments (On money), delayed vehicle deliveries, and increased car prices after booking with full or partial payments.
However, the investigation is currently hindered by a court order and non-cooperation of Honda Atlas Cars (Pakistan) Limited. Since the start of enquiry on 29 November 2018, the company has failed to respond to CCP’s requests for information. From November 2018 to November 2022, CCP wrote six letters to call for information under the law, but the company failed to fully cooperate with CCP.
In January 2023, the company filed a writ petition in the Lahore High Court and obtained a stay order. In January 2023, Lahore High Court permitted CCP to proceed with the enquiry but refrained it from passing a final order. However, in complete disregard of the court order, Honda refused to provide further information.
The CCP initiated the enquiry after noticing car manufacturers, such as Honda, Toyota, and Suzuki, increasing prices for booked vehicles. Numerous consumer complaints through the PM Portal further prompted the investigation. These leading manufacturers were also causing delays in vehicle delivery and raising prices even after customers made full or partial payments. Authorized dealers were exploiting customers by charging premiums (On money) for early delivery. CCP expanded the enquiry to other car manufacturers entering the market.
The purpose of the CCP’s enquiry is to determine whether these practices distort competition. However, the conclusion of the enquiry is contingent on the Lahore High Court’s final decision regarding the dismissal of Honda Pakistan’s stay order. The case has been listed for hearing in the first week of December 2023. The matter is still under investigation, and no adverse findings have been made by CCP against any company. There is no prejudice caused so far. If there’s an adverse order, remedies include appeal to the Competition Appellate Tribunal, and the Supreme Court of Pakistan. In a recent case of Dalda, the Supreme Court endorsed CCP’s enquiry and information gathering powers. The CCP has actively intervened in the automobile sector in the past to safeguard consumer interests. In 2015, the CCP imposed a substantial fine of Rs140 million on the Pakistan Automobile Manufacturers Authorized Dealers Association (Pamada) for exploiting consumers by manipulating the prices of their products and services.
In 2013, CCP revised the terms and conditions outlined in the Provisional Booking Order (PBO) of car makers. As a result of this intervention, Toyota began accepting partial payments, marking a significant departure from previous practices. This development resembled a consent order, as both Toyota and Suzuki willingly amended their conditions in response to the CCP’s regulatory influence. Given the diverse array of players offering various products to automobile customers, the CCP relies on support from the courts to effectively fulfill its role in safeguarding consumer interests.