Pak Suzuki Motor Company (PSMC) announced on Wednesday that its car plant would close for five days due to a lack of inventory.
Banks continued to be hesitant to open letters of credit (LCs) in light of the persistent dollar crunch.
The government has so far failed to increase its foreign exchange reserves, which are at a critical level of about $3 billion, barely enough for less than three weeks of imports. As a result, import-based businesses are having a difficult time remaining afloat.
The company stated that it had “decided to shut down the automobile plant from February 13, 2023, to February 17, 2023, due to continued shortage of inventory level” in a letter to the Pakistan Stock Exchange (PSX).
However, the Pakistani division of the Japanese automaker did note that the motorcycle plant would continue to run.
The company has previously announced that it will halt production from January 2 to January 6, from January 9 to January 13, and from January 16 to January 20, 2023. This announcement marks the fourth time that this has happened.
Last month, the company increased the prices of its various car models by up to Rs355,000 due to an increase in production costs brought on by the depreciation of the rupee against the dollar.
According to statistics provided by the Pakistan Automotive Manufacturers Association (PAMA), sales of passenger cars decreased 44% in December from the same month the previous year, falling to 13,768 units from the 24,471 units sold in December 2021.
It was added that Pak Suzuki had reported a decline of 8% month over month to 11,342 units.
It should be noted that Suzuki cars, pickup trucks, vans, 4x4s, motorcycles, and related spare parts are all manufactured, assembled, and sold by PSMC.
The country’s sole manufacturer of Toyota vehicles, Indus Motor Company (IMC), also decided to “completely” close down the facility from February 1 through February 14 due to “insufficient inventory levels.”.
In a letter to the PSX, the IMC management stated that in light of the recently implemented mechanism in EPD Circular No. Commercial banks were instructed to prioritize and facilitate imports to specific sectors only, which did not include the auto industry, in Commercial Bank Circular No. 20 of 2022, dated December 27, 2022 (effective from January 2).
To import raw materials and obtain clearance for their shipments from commercial banks, the notice stated that “the company and its vendors continue to face significant obstacles.”.
Additionally, the business has chosen to begin production on a “single shift” basis beginning on February 15 and continuing until further notice.
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