Skyrocketing auto prices – Breaking News – The Nation

Automobile prices in the country have increased dramatically over the past few months, which has caused concern and alarm among the public and also in government halls. According to reports, since January 2022, automakers such as Toyota Indus Motor Company (IMC), Honda Atlas Cars (HCAR), Lucky Motor Corporation (LMC) and a few others have announced several price hikes for their respective locally assembled cars. Noting this trend, the automotive regulator Engineering Development Board (EDB) has raised concerns with manufacturers and called a meeting.
Reports reveal that the EDB has asked auto assemblers to share their cost structure and justify the constant price increase at the meeting due to take place on May 10. The situation is becoming untenable, especially for the low to middle income classes, as the prices of “affordable” bikes such as the Honda CD70 have also crossed the Rs 100,000 mark. The government is right to state that this trend is unacceptable and that it may need to consider introducing regulatory measures, which could include price fixing under the Price Control, Prevention of Profits and Hoarding Act 1977.
Some in the auto industry have responded saying that this issue is beyond the purview of the government since Pakistan is a free market. However, this is not entirely true, as there is significant government intervention in the market. Furthermore, if the government can provide subsidies and facilitate the sector in other ways, the same principle can also apply in the case of regulation.
So far, the government has only asked for an explanation of the cost structure and inflationary pressures the industry faces. Importantly, the government raised a similar concern last year with automakers, but nothing came of it and the trend continued unabated. Authorities should ensure that the case is not closed with a simple explanation, and that cost records and raw material prices are reviewed to ensure there is no deliberate manipulation in game here.

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