Plant shutdown warning by Pak Suzuki!
Pak Suzuki Motor Company (PSMC), which has the largest market share in the passenger car segment, said on Tuesday that it has stopped accepting new bookings from July 1 and warned that it may close its plant next month if imports are curtailed.
As per the Pak Suzuki public relation head, “SBP has introduced a mechanism for prior approval of imports under HS code 8703 category (including CKD). The restrictions affect the clearance of imported cargo from the ports. “In July, Pak Suzuki production did not stop while we adjusted our production schedule. Currently, commercial banks do not open letters of credit, payment documents for ČKD vehicles.
“Non-availability of CKD and related raw materials may lead to closure of plants in August. If the same situation continues, then we will face more problems from August 2022.” The company’s announcement comes after media reported that Pakistan’s auto industry is struggling to meet scheduled delivery times as restrictions prevent the timely importation of auto parts, prompting the mechanic to offer refunds to its customers, an unusual development that is taking place in the background, dwindling foreign exchange reserves of the country.
Shaikh said the future of taking orders depends on how the situation normalizes. “As a responsible organization, we are trying to deliver all reserved vehicles by June 22,” he added. On the other hand, Indus Motor Company (IMC) offers refund with additional interest to its customers. If they want to proceed with their order, they have to wait at least three months from the delivery month indicated in the PBO (Provisional Booking Order Form) and pay the price difference due to the exchange rate situation, the CEO said.
The industry, which is heavily dependent on imports, is caught in the middle of an exchange rate crisis with auto sector players, passing on the impact of the rupee’s depreciation to their customers or, in the case of IMC, offering refunds to customers in addition to their interest payments. Last month, IMC announced that it was facing major issues affecting the delivery schedule of already booked orders. The crisis stems from pressure on Pakistan’s foreign exchange reserves, a development that also hurt the rupee, which closed close to the 233 level against the US dollar on the interbank market on Tuesday. Last week, the rupee experienced its worst week in over two decades.
