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Following Toyota Indus Motor Company (IMC), Pak Suzuki Motor Company Limited (PSMCL) has also been forced to halt production at its Karachi plant due to a prolonged delay in the clearance of Completely-Knocked Down (CKD) kits.

This unexpected shutdown has sent shockwaves through the automotive industry, highlighting the critical challenges faced by manufacturers in Pakistan.

The delay in CKD kit approval has resulted in significant financial losses for PSMCL, including hefty detention and demurrage charges. Moreover, the government’s revenue from taxes and duties has also taken a hit due to the halted production and sales.

Toyota Indus Production Shutdown

A day earlier, IMC has also announced back-to-back production shutdowns in last 30 days. In a recent update, the company has announced second production cut commencing from August 6, 2024 to August 8, 2024 (both days inclusive). Earlier, the company closed its production plant from 5th July 2024 to 22nd July 2024.

In a communication to Pakistan Stock Exchange (PSX), the local auto maker informed that ongoing supply chain issues have resulted in critical shortages of parts and components. This has caused a significant decline in raw material inventory and is hindering vehicle production.

The Concerns & Way Forward

Industry associations, including PAMA and PAAPAM, have raised concerns about the government’s adherence to the auto policy and the negative impact of such disruptions on investor confidence.

The broader automotive industry is already grappling with numerous challenges, including high taxes, interest rates, and energy costs. These factors have compelled many local parts manufacturers to lay off workers and reduce production. The current crisis has exacerbated these issues, with around 140-145 vendors affected by the PSMCL shutdown.

Experts emphasize the urgent need for government intervention to address the underlying problems. They suggest that industrialists should be involved in finding solutions and that any irregularities should be rectified promptly.

What do you think about the recent production halt announced by Pak Suzuki? Drop your thoughts in the comments section.