Indus Motor temporarily halts production citing inventory shortage

Indus Motor Company (INDU) has announced another shutdown of its plant for six days citing low inventory and shortage of components.

The company shared the development in a notice to the Pakistan Stock Exchange (PSX).

“Based on the current low level of inventory of manufactured vehicles, and shortage of parts and components for manufacturing of vehicles, due to supply chain challenges, the company has decided to close its production plant from 6th March 2024 to 11th March 2024 (both days inclusive),” read the notice.

Pakistan’s auto sector has been under pressure with the country’s slowing economic growth, spiking inflation, and high costs of borrowing denting sales of vehicles.

Analysts say it hasn’t helped that the sector – heavily reliant on imports – has moved to increase prices in tandem with the dollar’s appreciation with many calling for higher localisation to counter the dependency.

Last month, Indus Motor Company announced that its board has approved an investment of around Rs3 billion (~$10.76 million) for enhancing the localization of production.

Indus Motor back then shared that the investment was part of the company’s overall plan to continuously increase the localization of parts and components of vehicles manufactured locally.

As per the company’s latest financial results, the company posted a profit of Rs4.95 billion for the half-year ended December 31, 2023, an increase of 89% when compared with earnings of Rs2.63 billion in the same period of the previous year.