KARACHI, May 30: Authorized car dealers, on the instructions of car assemblers, are discouraging bookings on cash basis and preferring orders by corporate, multinationals, leasing companies and banks. Assemblers have allocated a monthly quota to their authorized dealers. Buyers, looking for booking of car on cash basis, are facing problems as the dealers are reluctant to book individuals on the plea that it is hard to differentiate between investors and genuine buyers in such cases.

Executives in car companies and even their authorized dealers are not ready to share the monthly figure of quota allocation, saying that the quota varies from dealer to dealer. They say that this limited booking restriction has somewhat helped them in discouraging investors and speculators in the markets, besides ensuring timely delivery to the genuine buyers.

However, raising production capacity by over 100pc by all the makers in the last one year has yet to ease supply position in the market as delivery timing still ranges between two to four months depending on the models. Even the menace of ‘premiums’ on locally assembled cars still exists.

A senior executive in Pak Suzuki Motor Company Limited (PSMCL) told Dawn that the company had issued a booking cap to its dealers and allowed them to reject the booking on cash basis in case they thought that the buyer was an investor or not a genuine buyer. “The dealers now feel satisfied in taking booking of cars from corporate and multinational customers.”

He says the PSMCL is quite sure that a corporate and MNC client, after booking a car through leasing and financing, has no chance to sell it as he has to pay a huge amount as penalty in case he is willing to sell the car. The car loses its value once it is registered with the taxation authority. On the other hand, he adds, buyers willing to book on cash basis are really hard to identify as genuine buyers that is why the company has instructed its dealers to book the car after a thorough check.

“Only those buyers are clamouring and lodging protest with the dealers and even approaching directly to the companies who are supposed to be looked as investors or not genuine buyers and their plans are just to sell the car and earn hefty premiums,” the official said. “That is why these kinds of buyers are shy in purchasing a registered car,” he adds.

He said that over 70 per cent of cars were being sold through leasing and bank financing, while 30 per cent on cash basis. “If 7,500 cars a month are being rolled out by Pak Suzuki, then it means that a sizable quantity is still selling on cash basis.”

The main objective to limit the booking was to keep the average delivery period of cars between two to three months otherwise, in case of open booking, the delivery period, in view of robust demand, might have ranged between six to eight months.

“Our dealers are booking as per our production capacity and ability to deliver it on time,” the executive said. Pak Suzuki enjoys over 50 per cent market share with its 54 authorized dealer’s across the country.

An authorized dealer of Toyota Corolla and Daihatsu Cuore said that the company had allocated booking quota to its dealers in order to clear the previous backlog, besides aiming at reducing the delivery time.

An executive in Indus Motor Company (IMC) said that the company was taking the booking as per its capacity to deliver it. However, the IMC preferred to take booking arriving through leasing and bank financing whose share has surged to 90 per cent. “We are not taking excess orders,” he added.