Facing serious hardships in importing raw materials, Pakistan’s leading car manufacturer, Indus Motor Company (IMC), has decided to temporarily shut down its auto production plant from August 1-13.
The company secretary announced via a notice to the Pakistan Stock Exchange on Friday that rupee devaluation and government restrictions were adversely affecting the supply chain and production activities. Restrictions, including letters of credit constraints, had made it impossible to import completely knocked down (CKD) kits without prior permission as well as components, which had resulted in delay and insufficient inventory levels as would be required to maintain further production.
“The situation is forcing the company towards a temporary production shutdown and closure of the company’s plant,” he said. “In the light of above, the company has today decided to temporarily shut down its production plant from August 1, 2022, to August 13, 2022.”
The official Toyota Indus Motor Company (IMC) previously denied rumours that it would halt production for more than two weeks in an official notification to Pakistan Stock Exchange (PSX).
The previous notification stated:
“The company would like to clarify that as of today, there are no plans fixed for a complete plant shut down for more than two weeks in the month of August 2022. The production schedule of the company and any non-production days (NPDs) remain contingent on a number of external and variable factors. The company is actively monitoring its production and operations, and is closely working with the government and SBP to alleviate the present challenges.”
In order to handle the sluggish imports of CKD, the manufacturer had previously declared NPDs. According to the most recent rumours, IMC will reimburse clients who recently booked vehicles.
Ali Asghar Jamali, CEO of Toyota IMC, said the following on this:
“We will give customers the option to avail a refund with the full interest. In case they choose not to opt for this (refund), they will have to wait at least 3 (more) months from the delivery month given on the Provisional Booking Order Form and (also) pay the price differential due to the exchange rate situation.”
Given the justification, manufacturing has significantly decreased, which will probably have a detrimental effect on automobile sales in the near future.