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It’s been months since we have not received any update translating production cuts or shutdowns from any local car makers. Zero disruption in the supply chain and no restriction on Letters of credit made this possible.

However, in a recent update, Toyota Indus Motor Company (IMC) has halted the production of its car for a week. In a communication to Pakistan Stock Exchange (PSX), the company revealed the update.

The notice read:

“Based on the current low level of inventory of manufactured vehicles, and shortage of parts and components for manufacturing of vehicles, due to supply chain challenges, the company has decided to close its production plant from 15th July 2024 to 22nd July 2024 (both days inclusive).”

With shattered economic charts, hyper- inflation, and ceased purchase power of customers, Pakistan’s car stands at a critical juncture. For instance, according to JS Research report, BIG 3, including Pakistan Suzuki Motor Company (PSMC), Honda Atlas, and Toyota Indus Motor (IMC), sold 88,000 units combined for the fiscal year 2023-24, plunged to a 21-year low.

Low Sales

In contrast, these Japanese car makers sold a total of 113,346 vehicles in the fiscal year 2022-23, the report further informed. In conjunction with dwindling sales and production, an increased influx of imported used cars has also made a considerable dent in local assemblers. That’s why, a week back, PAMA and PAPAAM, in a letter to the Prime Minister, asked to increase withholding tax on Imported used cars under 1300cc.

The associations raised concerns by highlighting the data for the period of January-May 2024, narrating that about 62% of imported of use cars belong below 1300cc. However, PAMA also proposed to impose a 15% regulatory duty (RD) on the import of cars with engine capacity below 1300cc while maintaining the current rate of newly imposed RD on vehicles exceeding 1300cc engine capacity.

Furthermore, the continued use of SRO 577 (I) 2005, last updated in 2015, leading to substantial revenue loss for the government, was also among the recommendations.

What do you think about the recent production shutdown announced by IMC. Tell us in the comments section.