CCP's investigation into major car manufacturer stalled

ISLAMABAD: The Competition Commission of Pakistan (CCP) is once again grappling with obstacles in its ongoing inquiry into the automobile sector, specifically targeting consumer exploitation encompassing premium payments (On money), delayed vehicle deliveries, and escalated car prices post-booking with full or partial payments. The investigation, initiated on 29 November 2018, encountered setbacks due to a court order and the non-cooperation of Honda Atlas Cars (Pakistan) Limited.

According to available details, despite six letters from CCP requesting information between November 2018 and November 2022, Honda Atlas Cars (Pakistan) Limited has failed to fully cooperate with the inquiry. In January 2023, the company obtained a stay order through a writ petition filed in the Lahore High Court, obstructing the investigation. 

Although the Lahore High Court permitted CCP to proceed with the inquiry in January 2023, it refrained from issuing a final order. Honda, however, disregarded the court order and refused to provide further information for the purpose of the inquiry.

The CCP's investigation arose from observations of car manufacturers, including Honda, Toyota, and Suzuki, raising prices for booked vehicles. Consumer complaints via the PM Portal further fueled the inquiry, citing delayed deliveries and increased prices even after customers made full or partial payments. Authorized dealers were accused of exploiting customers by imposing premiums (On money) for early delivery. The CCP expanded the investigation to include other car manufacturers entering the market.

The outcome of the CCP's inquiry hinges on the Lahore High Court's final decision regarding the dismissal of Honda Pakistan's stay order, with the case scheduled for a hearing in the first week of December 2023. As of now, no adverse findings have been made by CCP against any company, and there is no reported prejudice. In the event of an adverse order, remedies for Honda include an appeal to the Competition Appellate Tribunal and the Supreme Court of Pakistan.

The CCP, with a history of actively intervening in the automobile sector, imposed a substantial fine of Rs 140 million on the Pakistan Automobile Manufacturers Authorized Dealers Association (Pamada) in 2015 for exploiting consumers. In 2013, the CCP revised the terms and conditions in the Provisional Booking Order (PBO) of car makers, prompting positive changes in practices by Toyota and Suzuki.