KARACHI: Pakistan’s Toyota manufacturer, Indus Motor Company (IMC), will close its production for two days due to “insufficient inventory level”.
The automaker’s fifth output decrease announcement this year.
The corporation declared June 26 and 27 non-production days at the factory. Pakistan Stock Exchange (PSX) was notified.
IMC corporate secretary Muhammad Arif Anzer told the PSX that the company cannot continue manufacturing due to low inventory levels.
According to the notice, IMC and its suppliers have had trouble importing raw materials and clearing their consignments due to difficulties opening letters of credit (LCs) and supply issues by some overseas vendors.
“This has disrupted the company’s supply chain and vendors are unable to supply raw materials and components,” the warning stated.
IMC has seen four 2023 non-productions. Production stopped February 1–14, March 24–27, May 2–3, and June 3–8.
Due to Pakistan’s limited foreign exchange reserves, auto importers have had trouble getting LCs. As of June 16, the State Bank of Pakistan’s foreign reserves were $3.5 billion, barely enough for a month’s imports.
Since gaining office, the existing government has tried to reduce imports to save the country’s fast-depleting FX reserves.
The center’s recent current account surplus came at the cost of a national economic slowdown. Restricting imports had repercussions for industries that on imports to finish their products.
This Monday, Pak Suzuki Motor Co Ltd announced another two-week stoppage at its bike and automotive operations, citing inventory shortages that have caused a sharp drop in car sales and substantial industry layoffs.
Pakistan Automotive Manufacturers Association reported 80% year-over-year car sales decline in May 2023.
92,554 units were sold in the first 11 months of FY23, down 56% from 210,633 in FY22.
IMC’s July-March FY23 profits fell 62% to Rs5.843 billion from Rs15.292 billion.
