KARACHI: One of the country’s largest automakers, Pak Suzuki Motor Company Limited (PSMC), has extended the closure of its plant until January 13, blaming the decision on inventory shortages.
“Due to the ongoing shortage of stocks, the company management has decided to extend the closure of the automobile plant from January 9, 2023 to January 13, 2023,” the PSMC said in a statement to the Pakistani bourse. (PSX) Friday.
However, the motorcycle factory will remain operational, he added.
Previously, the company’s automobile and motorcycle plants remained closed for a period from Jan. 2 to Jan. 6.
A PSMC spokesman said last week that the company was at a critical juncture due to import restrictions and would not give any future information on how long the problems would last.
“Detention, Demurrage and Kibor +3% are really hurting our industry,” he said.
Dealers and sellers are also unsettled by the decline in sales and production, said the spokesman. He urged the government to hold a discussion with industry to resolve the issue urgently.
Pakistan’s import-dependent auto industry is caught in the midst of a slump amid government-imposed import restrictions.
According to the Pakistan Automotive Manufacturers Association (PAMA), passenger car sales in the first five months of fiscal 2023 fell 39 percent to 55,144 units from 90,303 units sold in the same period last year.
With the exception of Suzuki’s Alto, sales of all other variants of cars, trucks, buses, tractors, jeeps, pickups and three-wheelers and two-wheelers were down in November 2022 compared to November 2021, he added.
A number of companies have announced production shutdowns in recent months.
Last month, Indus Motor Company (IMC) announced a 10-day plant shutdown, for the third time in 2022, due to “import and shipping clearance obstacles.”
IMC management mentioned that the central bank has set up a mechanism for obtaining prior approval for the import of kits and fully disassembled components of passenger cars for the automotive sector.
“[However] the delay in the above approvals has resulted in impediments for the Company and its suppliers to import and clear shipments of the Company’s raw materials and components,” IMC said.
Auto parts maker Baluchistan Wheels Limited also announced the closure of its plant last week due to weak demand.
Earlier this week, Millat Tractors also closed the plant until further notice due to lower demand and a lack of funds.
The government has decided to rein in imports amid rapidly dwindling foreign exchange reserves, currency devaluation and widening current account deficit, which has had a cascading effect on industries that depend on imports to manufacture finished goods.