Responding to a question from the Member of Parliament (MP) of South Thimphu, Yeshey Zimba, on whether rules are in place to monitor the high vehicle prices charged by automobile agents in Bhutan, the Economic Affairs Minister, Norbu Wangchuk, said the procedures on vehicle dispatch, company price, transportation costs and dealer’s commission, and the dealers – irrespective of vehicle or other materials, work in accordance to the Bhutan Wholesale Trade Regulation, 2006.
Lyonpo said that individuals, if dissatisfied with the price of vehicles sold by the dealers in Bhutan, can also directly import the vehicles from India. “It is very important to give people such options,” Lyonpo Norbu Wangchuk said.
This was line with a recent notification issued by the Department of Trade under the Ministry of Economic Affairs giving them that option if they feel local dealers are overcharging them.
MP Yeshey Zimba raised the question in Parliament after a constituency meeting held in Thimphu Thromde where people had complained to him that the cost of purchasing vehicles through agents in Bhutan was significantly higher than the prices in India for the same vehicle.
He added that many in the meeting felt that the Bhutanese agents were abusing their monopoly status as purchase from outside is not permitted.
Economic Affairs Minister said, “When it involves dealers, it is done in lakhs, if it is so, the price should be charged after having discussion with their principal dealers. And secondly, if the principal company provides an additional discount, it should be provided to customers as well.”
Lyonpo Norbu Wangchuk added that sales services, such as transportation services, should be also provided to the customers if there are any given from their principal company.
A team from the Ministry of Economic Affairs has carried out a study on the issue of overpricing of vehicles sold in Bhutan by 10 vehicle dealers. However, the study found that vehicles sold in Bhutan are not overpriced. Economic Affairs Minister said a standard rate of 1.5 and 12 percent commission rate is being charged on vehicles sold in Bhutan.
Further, the House was informed that there are two types of commissions earned by vehicle dealers in the country; firstly, the commission rate is determined and clearly reflected by principal company, and secondly, the principal company grants authority for the dealer to determine the company rate.
Lyonpo said the doubts among the customers were raised because of the failure on the dealers’ part to clearly explain the cost break down to their customers. The ministry observed that charges for transportation, driver and insurance are added to the price of vehicles, which is why consumers felt that the vehicles were overpriced. “We told the dealers to clearly explain to the people while they do cost breakdown,” Lyonpo said.