Toyota and Suzuki production cuts, plant closures: Why are car manufacturers in Pakistan unable to deliver vehicles to customers?

Toyota and Suzuki : In addition to production cutbacks by car manufacturing companies in Pakistan there have also-been announcements of plant shutdowns for a few days in the next few weeks.

Bookings of new vehicles have-been stopped by a few companies while the customers of already booked vehicles are also facing a lot of difficulties in delivery.

After car manufacturers cut production in the month of July  announcement of further production cut in August will further delay the delivery of vehicles to customers which has worried the customers who have also deposited advance amount. has happened.

Toyota and Suzuki production cuts, plant closures: Why are car manufacturers in Pakistan unable to deliver vehicles to customers?

According to car dealers Toyota Indus Motors Pak Suzuki have-been told not to take any more bookings Kia Motors has had a slight problem but not much while Honda Motors has not stopped bookings.

In this regard Toyota Indus Motors has officially told the customers that if they want they can withdraw the amount deposited as advance without any deduction.

Why was production reduced?

The car manufacturing companies had told the Parliament's Public Accounts Committee last week that Rs 150 billion has been taken from the customers by the car manufacturing companies in the country in the form of advance money given for bookings. Committee expressed its displeasure over the delay in the delivery of the vehicles & also sought details about the financial accounts of the companies from the Auditor General of Pakistan.

Among the reasons given by the companies for delay in the delivery of the vehicles difficulty in importing parts to manufacture the vehicles due to the rising value of the dollar is at the top.

According to the companies most of the parts are procured from abroad & due to unavailability production activity is affected & vehicle manufacturing is not possible due to which the delivery of vehicles to customers will-be delayed.

It should be noted that in the fiscal year ended on 30 June the sales of vehicles manufactured in the country recorded an increase of 54 percent compared to previous year and a total of about 280,000 small and large vehicles were sold in country.

On the other hand the price of vehicles in the country has also-seen a huge increase which is attributed to the increase in value of the dollar $ by car companies.

Toyota and Suzuki production cuts, plant closures:

Lack of $ dollars is the biggest problem

Toyota Indus Motors a car manufacturing company informed in its written statement to the questions raised by us that State Bank Pakistan is allowing them only 35 to 40 percent of their required dollars to import parts which Due to this they have reduced their production accordingly.

Mr Shafiq A Shaikh Spokesperson of Pak Suzuki Motors said in this regard that banks are not opening LC for import which is required for CKD kits.

It should be noted that currently the dollar value in Pakistan is at the highest level in the country history & the value of 01$ dollar is more than 236 rupees.

At present LC for imports is settling above Rs 240 per 01$ dollar & due to low inflow of dollars from external sources in the country there are difficulties in opening LCs for imports which is a victim of the auto sector. So are companies operating in the country as there is a huge pressure on the country foreign exchange reserves due to the rising import bill.

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According to the spokesperson of Pak Suzuki the production process was adjusted in some way in the month of July but if the situation persists company may close its plant in the month of August. According to the spokesman future increase in production depends on LC opening.

Mr Mashhood Ali Khan an expert in the auto sector Said that the lack of dollars in the country is currently the biggest problem. He said that  raw materials & spare parts used in the manufacture of vehicles are mostly imported from abroad so if banks do-not open LCs production will necessarily be affected.