Karachi, August 8, 2024 – Pak Suzuki Motor Company (PSMC) announced on Thursday that it has suspended operations at its production plant due to a shortage of Completely Knocked Down (CKD) units, a critical component for assembling vehicles.
This unexpected shutdown highlights the growing challenges facing Pakistan’s auto industry, exacerbated by ongoing supply chain disruptions.
In an official statement, Suzuki Motor explained that the decision to halt production was driven by the prolonged non-clearance of CKD units, which have been stranded at the port for the past 45 days. The company emphasized that the delay in obtaining approval for the release of these units has forced it to cease operations, impacting its ability to manufacture and sell vehicles.
The situation has placed significant financial strain on Pak Suzuki, which is incurring substantial costs in the form of detention and demurrage charges, amounting to billions of rupees. Moreover, the government is also losing out on potential revenue from taxes and duties that would have been generated through the production and sale of vehicles.
Industry experts warn that the continued disruption could have far-reaching consequences. The halt in production not only affects Suzuki but also has a ripple effect across the entire automotive sector. Local parts manufacturers, who rely on consistent production schedules, are facing severe challenges, with many forced to lay off thousands of workers due to the lack of demand for components. This has raised concerns about the broader economic impact, particularly in terms of job losses and the potential withdrawal of foreign direct investment (FDI).
In response to the crisis, industry stakeholders have called on the government to adhere to the provisions outlined in the Auto Policy 2021-26. They argue that failing to do so could deter new investors from entering the market and drive existing foreign investors to reconsider their commitments. The auto industry is urging the government to expedite the clearance of CKD units and to implement policies that ensure the stability and growth of the sector.
Pak Suzuki’s shutdown underscores the fragility of the automotive supply chain in Pakistan, where delays in approvals and logistical bottlenecks can bring production to a standstill. The company’s statement serves as a stark reminder of the urgent need for regulatory clarity and support to sustain one of the country’s key manufacturing industries.
As the situation develops, the auto industry will be closely monitoring the government’s response, which will be crucial in determining the future trajectory of automotive manufacturing in Pakistan.
