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Friday, June 7, 2024

Pak Suzuki Motor announces another plant shutdown till Sep 23

Pak Suzuki Motor Company Limited has extended its plant shutdown due to a shortage of raw materials following the import ban by the central bank.

The company notified the Pakistan Stock Exchange (PSX), that the State Bank of Pakistan (SBP) had introduced a mechanism for prior approval for import under HS Code 8703 category including CKD through circular No. 09 in May this year. This restriction has adversely impacted the clearance of import consignment and inventory levels.

PSMC is facing a severe shortage of raw materials for the past few months, despite which it had announced a temporary closure of its production. However, the company has decided to extend its shutdown period for the automobile plant due to a shortage of inventory levels following the State Bank’s decision. On the other hand, the company has confirmed that the motorcycle plant will remain operative.

In its official notice to the Stock Exchange, the company said;

“However, due to continued shortage of CKD raw material, management decided to extend the shutdown of automobile plant from September 12, 2022, to September 16, 2022,”

The notice further said;

“Further, instead of periodic maintenance, the automobile plant will also be shut down from September 19, 2022 to September 23, 2022.

Previously in August also the company had to shut its automobile production due to a shortage of raw materials and CKD kits.

Read more: Suzuki resumes booking for all cars but excludes its best sellers

Conclusively, Pakistan’s auto industry is highly dependent on imports and has been caught amid of an exchange-rate crisis, as the SBP, after the persistent rupee devaluation, imposed restrictions on the opening of Letters of Credit (LCs).

Therefore, since July the automakers have seen intervention from the central bank for opening LCs for the import of CKD kits to avoid delays in car deliveries and further cost escalation.