KARACHI: Indus Motor Company Limited on Tuesday announced to temporary halt its production of Toyota vehicles in Pakistan.
Indus Motor is the manufacturer of Toyota cars in Pakistan.
“The company has decided to temporarily shut down its production plant from September 01 to 16, 2022,” the company said in a communication sent to the Pakistan Stock Exchange (PSX).
“However, in case of any change in production plan due to approvals is being sought, the same will be communicated accordingly,” it added.
Indus Motor said that the State Bank of Pakistan (SBP) had introduced a mechanism through Circular No. 09 of 2022 on May 20, 2022, for obtaining prior approval for import of CKD kits and components of passengers cars (HS Code 8703 category) for the auto sector.
“The delay in aforesaid approvals has created hurdles in clearance of import consignments of the company, resulting in significant reduction in inventory levels and consequently, creating adverse impact on the supply chain and production activities,” it added.
The company said that due to insufficient inventory levels to maintain production, the company has decided to temporarily halt its production activities.
Previously on July 29, 2022 the company in another communication sent to PSX stated that due to unforeseen devaluation of the Pakistani Rupee, coupled with the Government restrictions, including the LC approval constraints rendering it impossible to import CKD kits without prior permission, and the continuing economic instability, the company is facing hurdles in import of CKD kits and components which is adversely affecting the supply chain and production activities.
“The aforesaid delay and unforeseen factors have resulted in insufficient inventory levels as would be required to maintain further production. The situation is forcing the company towards a temporary production to shutdown and closure of the company’s plant.”
“In the light of above, the company on July 29, 2022 decided to temporarily shut down its production plant from August 01, 2022 to August 13, 2022,” according to previous announcement.
The company in a report said that the auto sector is facing unprecedented difficulties in its operations due to ongoing economic challenges and factors beyond the control of automobiles manufacturers.
The company further added: “the unprecedented devaluation of Pakistan Rupee (PKR), coupled with restrictions imposed by the State Bank of Pakistan (SBP) regarding prior LC approval for Completely Knocked Down (CKD) imports and continuing financing instability has radically impacted the auto industry.”