IMC, Toyota manufacturer in Pak, to close production from Dec 20 to 30
The management of Indus Motors informed the general manager of the Pakistan Stock Exchange in a letter that the central bank had established a new procedure for obtaining prior authorization for the import of “CKD kits and components of passenger cars (HS Code 8703 Category)” for the automotive industry.
“The aforementioned delay in the business and vendor clearances has posed challenges in the import and clearing of consignments for raw materials and company components. This has led to inadequate inventory levels, which has negatively impacted the supply chain and industrial activities.
Pakistan’s car sector is already heavily reliant on imports and is currently experiencing an exchange rate crisis as a result of the SBP’s limitations on establishing Letters of Credit due to the persistent depreciation of the rupee (LCs).
IMC representatives said during a corporate briefing that continued currency devaluation and import restrictions enforced by the central bank are hurting the country’s car industry, especially Toyota. At the time, the latest news officials stated that the sector was suffering from rising manufacturing costs as a result of the rupee’s devaluation, while demand had decreased as a result of the recession, high loan rates, and increased tariffs and taxes on automobiles.
Since taking office, the coalition administration has worked to reduce imports in an effort to combat rapidly diminishing foreign reserves, a weakening currency, and a growing current account deficit. As a result, the rupee has lost more than 26% of its value this year.
It should be noted that the IMC had previously announced a temporary stoppage of its manufacturing facility from September 1 to September 15 due to a lack of inventory levels to support production as well as a holdup in SBP permissions for the import of CKD kits and passenger car components.
They said that the industry was now engaged in development efforts for a number of new models. The vendors and assemblers must import equipment, molds, tools, and fixtures for the creation of new technology cars and parts. The testing activities must be carried out several months before the commencement of mass production to ensure the smooth growth of local parts.