KARACHI: Pak Suzuki Motor Company (PSMC), one of the biggest automakers in the nation, has once more extended its closure until January 20 due to a lack of inventory.
The automaker’s production operations have been on hold for the majority of the days since the beginning of the year, citing a lack of imported parts and accessories, as banks are rejecting or retiring letters of credit (LCs) due to a lack of US dollars, an exchange rate crisis, and the nation’s rapidly depleting foreign reserves.
According to a PSMC notice to the Pakistan Stock Exchange, “the management of the firm has decided to extend the shutdown of the vehicle production from January 16, 2023 to January 20, 2023 due to continuous shortfall of inventory level” (PSX).
However, the motorcycle plant would remain operative, it added.
It was the third consecutive announcement by the company of keeping brakes at its production activities in 2023. PSMC welcomed the new year with a notice that it would observe non-production days from January 2 to January 6, having been affected by import curbs pushed by non-issuance of letters of credit.
The central bank had introduced a mechanism for prior approval for import under “HS code 8703 category (including completely knocked down-CKDs) vide circular No. 09 of 2022 dated May 20, 2022”, the company said in a note to PSX then.
Last week, PSMC notified the bourse again that it would keep the automobile plant shut from January 9 to January 13, attributing the same reasons for curbs on the import of CKD kits.
Import bottlenecks have continued to affect the auto industry in recent months, which is highly dependent on imported parts and accessories.
Passenger car sales plunged 44% in December from a year earlier, dropping to 13,768 units, against 24,471 units recorded in December 2021, as per data released by Pakistan Automotive Manufacturers Association (PAMA).
Pak Suzuki had reported a decline of 8% month-on-month to 11,342 units, it added.
It should be noted that PSMC is engaged in the assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, 4x4s and motorcycles and related spare parts.
Millat Tractors to resume production
Meanwhile, Millat Tractors Limited (MTL) is to resume its production activities from January 16, it announced in a bourse filing on Friday.
The company was observing non-productive days on the back of lower demand for tractors and cashflow constraints. Earlier, MTL had stopped operations on Fridays on December 16, 2022.
Tractors’ demand has declined owing to a catastrophic flood last year in the country. Sales of tractors dropped to 1,015 units, from 4,476 units in December 2021, according to PAMA data.