The recent pressure on auto manufacturers to increase their production to ensure much faster vehicle delivery process may benefit the buyers, but at the huge expense of auto manufacturers.
There is no arguing that some vehicle manufacturers in Pakistan have reduced their production volume in the last two years or so; in 2009, they reduced their production volume by half as against 2008. But such reductions have largely been due to sliding demand caused by inflationary pressures and sluggish economy.
A cursory look at the numbers makes it apparent that car manufactures adjust their production level according to market demand; for example during 2000-2007, the manufactures increased production in order to meet higher auto demand.
Crucially, working below capacity level is not favorable due to high fixed cost pressure. If they increase their production to bring about quicker car delivery, excess supply of vehicles will increase their losses, as many of these units will not be sold. Simultaneously, they will have to incur high maintenance cost and require additional space to store the manufactured vehicles.
To summarize: it is not low production but slow production that allows dealers to charge the premium, fashionably called aun, for urgent car delivery. Unfortunately, this slower pace of production can be expedited, not at least in the short to medium term, as a number of factors limit their flexibility, including the number of work shifts that have to be planned at the start of every year.
Auto manufactures and assemblers decide on their production volume a year in advance, on the basis of demand forecasts - followed by a review at the start of every quarter to make minor adjustments, if any.
Add to that their dependency on imported spare parts from Japan, which takes about three months to be shipped to Pakistan. And the fact that they outsource equipments from local vendors, which is also a time consuming event, also restricts their ability to maneuver their plans in the midst of operations.
So, agreed that the premium charged for quicker delivery by auto dealers might be ethically challenged but this does not mean that automakers should produce more, because manufacturers are not in any position to supply cars to all the buyers any more urgently than they currently are.
If it is suspected that the dealer is piling stocks to create shortage and charges premium, the consumer can use the "booking number" to verify the date of car delivery by directly contacting the auto maker.
As for the so called aun charged by dealers, one cant really say much considering their argument that they invest their money to facilitate the buyer by supplying car - which is not exactly a necessity like wheat -- as and when the consumer wants. Perhaps, the aun-debate should best be left to those professors dealing with the obscure subject of business ethics.