A few days after Indus Motor Company (IMC) announced a temporary shutdown of its production plant, Suzuki Pakistan took the same step. In a notification, Suzuki said the State Bank of Pakistan (SBP) had introduced a mechanism for prior approval to import CKDs. “Restrictions have had adversely impacted clearance of import consignment, which resultantly affected the inventory levels,” the company said.
Therefore, due to a shortage of inventory level, the management of the company has decided to shut down its plant for automobiles as well as motorcycles from January 2, 2023, to January 6, 2023. “Further update, if any, in this regard will be communicated accordingly,” the notification read.
Previous Suzuki Car Plant Shutdowns
This is not the first time Suzuki is shutting down its plant; the company was forced to take the same steps back in August, September, October, and November 2022. The company observed 15 non-production days in September and October 2022 combined.
Here’s the overall schedule exhibiting production shutdowns witnessed in 2022.
- August 18 to August 19
- August 22 to August 26
- August 29 to August 31
- September 6 to September 9
- September 19 to September 23
- October 19 to October 21
Since the restrictions on Letters of Credit (LCs) by SBP, the auto industry has been facing tough times. The policy has impacted not only the production but also the supply and delivery to the consumers. The average wait time in Pakistan has gone up to 8-9 months. The more worrying aspect of this whole scenario is that there are no hints by SBP to remove these restrictions any time soon. It means that the situation will remain the same.
Meanwhile, on the other hand, the federal government did not extend 100% Regulatory Duty (RD) on the import of electric vehicles (EVs) in November. After the removal, the RD has come back to 0% on EVs import, meaning there is a significant drop in prices of these cars, and Audi Pakistan did announce a price reduction for its EVs. And there are reports that a considerable number of luxury EVs have been cleared post the removal of RD, meaning more dollars went out from Pakistan, which is the main reason for the non-issuance of LCs by SBP. A contradicting approach by the government.
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