Pak Suzuki Motor Company (PSMC) on Monday announced the temporary shutdown of its plant for automobiles and motorcycles from January 2 to 6, citing inventory shortage.

In a notice sent to the Pakistan Stock Exchange (PSX), PSMC said the State Bank of Pakistan (SBP) has introduced a mechanism for prior approval for import under HS code 8703 category (including CKDs) vide circular No.09 of 2022 dated May 20, 2022.

Facing massive economic headwinds, companies in Pakistan struggle to keep operations going

“Restrictions had adversely impacted clearance of import consignment which resultantly affected the inventory levels.

“Therefore, due to shortage of inventory level, the management of the company has decided to shut down its plant for automobile as well as motorcycle for period from January 02, 2023 to January 06, 2023,” said PMSC, which is engaged in the assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, 4x4s and motorcycles and related spare parts.

Pakistan’s auto industry, highly dependent on imports, has been caught in the midst of an exchange-rate crisis, as the SBP, after unabated rupee depreciation, imposed restrictions on the opening of Letters of Credit (LCs).

Economic experts have attributed the development to very high auto prices, which has crashed demand. They say that until import restrictions are eased and energy shortages are dealt with, the situation would only deteriorate.

Earlier, the management of Baluchistan Wheels Limited (BWHL) also decided to temporarily close or stop production activity due to depressed demand for autos in the market.

Earlier this month, Indus Motor Company (IMC), the assembler of Toyota-brand automobiles in Pakistan, also announced that it will completely shut down its production plant from December 20 to December 30, citing its struggle with delays pertaining to approval for imports.

Last month, officials of IMC in a corporate briefing session said import restrictions imposed by the central bank and ongoing rupee depreciation are denting the country’s auto sector.

Officials at the time said that the industry is bearing the burden of escalating production costs on account of rupee depreciation, while demand has declined due to the economic downturn amid high interest rates and augmented duties and taxes on vehicles.