Pak Suzuki Motor Company (PSMC) on Friday said it will once again extend its plant shutdown from January 16 to January 20, 2023 due to shortage of inventory.
The automaker shared the development in a notice to the Pakistan Stock Exchange (PSX).
“Further to our letter dated January 06, 2022 on the above subject, kindly note that due to the continued shortage of inventory level, the management of the company has decided to extend the shut-down of the automobile plant from January 16, 2023 to January 20, 2023,” read the notice.
“However, the motorcycle plant will remain operative,” said PMSC, which is engaged in the assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, 4x4s and motorcycles and related spare parts.
On December 26, PSMC had announced the temporary shutdown of its plant for automobiles and motorcycles from January 2 to 6, citing an inventory shortage back then as well.
At the time, PSMC said the State Bank of Pakistan (SBP) had 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.
The automaker stated these “restrictions had adversely impacted clearance of import consignment which resultantly affected the inventory levels”.
Pakistan’s auto industry, highly dependent on imports, has been caught in the midst of a 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 high auto prices, which have crashed demand. They say that until import restrictions are eased and energy shortages are dealt with, the situation would only deteriorate.
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Auto sales in Pakistan fell 38% in December 2022 to 16,811 units on a year-on-year basis, revealed data released by Pakistan Automotive Manufacturers Association.
The decrease was driven by restrictions on import of completely knocked down (CKD) units and problems pertaining to opening of LCs.
Experts foresee car sales to drop 40%-50% in fiscal year 2023.