Delivery Delays are Nothing Less Than a Blessing for Assemblers

Delays in deliveries are a bad thing, both for customers as well as the assemblers. But who cares for reputation in an uncontrolled & disregarded market like ours where government and authorities nowhere seem to exist and customers are at the mercy of assemblers to be fleeced in whatever way possible?

Since the pandemic in 2020, automakers around the world are experiencing supply chain issues due to which the deliverers get delayed, and it is quite understandable. But perhaps nowhere else in the world, this has become a tool to earn more money. Unfortunately in Pakistan, the more the deliveries are delayed, the more the chances for assemblers to earn extra.

What happens is that a company introduces a car to the market, and starts to collect the booking amount. It is another debate that assemblers can launch a new car even when they are literally not in a position to assemble/ deliver the units. A tentative delivery date is given at the time of booking and later, full payment of the unit is collected prior to the committed delivery date.

But here is when the fun begins. Assemblers can always transfer the price increase impact to customers even when they are fully responsible for the delays, intentionally or not. It might make sense to some if we are talking about partial payments, but here even those having paid 100% amount are brazenly charged for the added increase in price.

No one really questions why someone who got the vehicle booked 6 months ago and has already made full payment a couple of weeks ahead of the committed delivery date, is charged for forex fluctuations happening today. Although the government has fixed compulsory payment of Kibor +3% interest rate on the manufacturers for delivery beyond 60 days of initial deposited payment, the penalty is literally peanuts compared to what is being charged from the customers in the name of price hikes.

As recently revealed during the PAC (Public Accounts Committee) meeting, local assemblers currently have Rs. 189 billion of customers’ money, which they received as advance payments. The monthly interest earned on this sum of money is another debate, but the question comes as to why assemblers collected such a huge amount of money when they are yet to sort out their supply chain issues and are not yet in a position to deliver the booked vehicles on the promised date.

And it not just ends here, the presence of premium is another thing that 90% of customers pay only to get quicker deliveries of the units. The dramatization of various strict measures to curb the menace of premium/ on-money continues, while no concrete measure has been taken to eliminate the investors/ hoarders from the equation or ensure efficient production capacity utilization.

Assemblers must not be allowed to charge extra amounts from customers who have made full payments. If the company is unsure about its ability to deliver the vehicle on time, it should not accept full payment in the first place. But if it has taken the complete payment and is still not delivering the car but is demanding more money from customers, not only a hefty fine should be imposed but license cancellation should be initiated for making false commitments, deceiving the customers, and making unjust profit out of the hard-earned money of the auto consumers of Pakistan.

Curbing the menace of premium/ on-money and ending the misery of delivery delays is perhaps quite easy. All it needs are some strong regulatory measures, and that’s exactly what governments are supposed to do. But the question is, will our govt put the bell on the big cat?

UsmanAnsari

A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com