Agriauto extends partial plant shutdown in April as auto woes worsen

Agriauto Industries Limited, a manufacturer of auto components, announced extending the partial shutdown of its plant during April, read a notice to the Pakistan Stock Exchange (PSX) on Tuesday.

“Due to reduction in production volumes of our major customers, the company will be observing partial shutdown during the month of April 2023,” the company said.

As per information available on the PSX, Agriauto Industries was incorporated in Pakistan on June 25, 1981, as a public limited company. The company is engaged in the manufacture and sale of components for automotive vehicles, motorcycles and agricultural tractors.

Its clients include Suzuki, Toyota and Atlas Honda, automakers that are struggling and have shut down plant operations on multiple occasions as the auto sector deals with inventory shortage due to import restrictions.

Import restrictions bite: Pak Suzuki extends automobile plant shutdown

Agriauto Stamping Company Pvt. Ltd, the wholly owned subsidiary of Agriauto Industries, will also observe partial shutdown in April 2023 due to the same reasons.

Last month, Agriauto said it was going to partially shut down its plant during the month of March.

Pakistan’s auto sector remains engulfed in various crises. Listed companies including Pak Suzuki Motor Company (PSMC), Indus Motor Company Limited and Honda Atlas Cars have also been forced to halt production during recent months due to economic difficulties that have seen central bank foreign exchange reserves drop to a level barely able to cover four weeks of imports, leading the government to impose import restrictions.

The country remains short of much-needed dollars to meet its import and other external payment commitments. Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased $354 million, clocking in at $4.2 billion as of March 24, data released last week showed.

A shortage of foreign currency reserves has added pressure on the economy that relies heavily on imports to run its engines.

Meanwhile, the government remains busy wooing the International Monetary Fund (IMF) to revive the stalled Extended Fund Facility (EFF) programme, which if approved by its board would release a funding tranche of over $1 billion.