Pakistan court rejects car maker’s plea to stop probe into unfair price hike

A Pakistan court has rejected an application by one of the country’s biggest car manufacturers to quash an investigation into alleged unfair price hikes and asked the company to cooperate with the probe.

The order was issued by the Lahore High Court (LHC) on an application filed by the Atlas Honda Cars (Pakistan) Limited against the probe by the regulator.

The Competition Commission of Pakistan (CCP), tasked with ensuring fair market practices, opened an investigation against three automobile manufacturers in 2018 over an alleged unfair increase in vehicle prices.

A CCP press release issued on Friday said the inquiry focuses on “on-money” practices, delayed deliveries, and post-booking price hikes in the auto sector.

The on-money is a premium charged by dealers to customers for expedited delivery of vehicles, which otherwise takes months. The customers pay the premium and get their vehicles instantly, which also saves them from any revision in prices if the company increases the cost of vehicles between their booking and the delivery.

The court order said the company had responded to initial notices issued by the regulator but then filed an application to stop the investigation.

In his order, Justice Raheel Kamran said the company’s application was “devoid of any merit” and dismissed it.

The court has directed the CCP to conclude its investigation within six months, emphasizing the need for swift action.

Delays and non-cooperation

Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited, Japan, and the Atlas Group of Companies, Pakistan.

The commission, in its press release, accused Atlas Honda of non-cooperation and stonewalling its investigation.

It said Atlas Honda was issued multiple notices from 2018 to 2022, but the company repeatedly sought extensions and failed to provide the information on production, pricing, local parts ratio, and dealer arrangements.

Even during plant inspections in 2019 and 2021, CCP investigators were denied the required data, “raising serious questions about Honda’s transparency”.