Auto Vendor Association has revealed that 65,000 workers have been laid off in the last four months from the sector. The number was revealed during a meeting of the association last week. Although there is no report, the association shared this data after a survey of its own.
Sharing the news, economist Ali Khizar wrote that situation is similar in other industries.
Survey from a leading textile forum reveals layoffs of 1.5 million workers countrywide
Survey from auto vendor association reveals layoff of 65,000 (and counting) workers in the last four months
Situation is similar in many other industries
— Ali khizar (@AliKhizar) December 12, 2022
The possible reasons behind these layoffs are not secret anymore as the economic condition is quite unstable, the forex exchange is in the doldrums, State Bank of Pakistan (SBP) is not issuing Letters of Credit (LCs), meaning no import of CKD kits, and then there is political uncertainty. All these factors have played a major role in worsening the auto industry’s condition.
The auto assemblers are also facing serious issues with production; hence, many of these companies have repeatedly shut down their plants in the last few months. And there are reports that the shutdown will again happen in the coming months, showing the situation is not getting better anytime soon.
CKD/SKD Imports Fall
Last week, the Pakistan Bureau of Statistics (SBP) report revealed that the imports of Completely Knocked Down (CKD) and Semi-Knocked Down (SKD) kits have fallen by 33.51% during the first four months (July-October) of the Fiscal Year 2022. The data shows that the import in FY2022 was worth $131,991 compared to $219,183 in the same period last year.
Similarly, the imports of CKD motorcars dropped by 31.55%, while motorcycles saw a drop of 18.47%. Last but not least, the import of parts and accessories has declined by 18.89%.
CBU Imports Down
As per the same data, the import of Completely Built Units (CBUs) – also known as imported vehicles – has reduced by 58.48% in four months of Fiscal Year (FY) 2022-23 on a year-on-year (YoY) bases. The data shows that the current amount of automotive imports is $89,659 compared to $215,947 during the same period the previous year.
You can read the complete report by SBP here.
Note: US dollar is in thousand.
What is your take on the current condition of the auto industry? Please share your thoughts in the comments section.
