Auto Parts Import Drops Amid SBP Curbs
After plummeting car sales and local production to a new low, the State Bank of Pakistan restrictions came with a fresh effect – dropped auto parts import by 36.6% – clocked at $258 million in July-September compared to $407 million in the corresponding time last year.
Following the disruption, Pakistan Suzuki Motors Corporation (PSMC) observed 28 non-production days including five-day periodic maintenance. Whilst Indus Motor Company (IMC) shut down its production plant for 29 days during August to September. Similarly, Honda Atlas Cars Ltd witnessed a 12-day closure. Moreover, car financing in July-September reported a slump of $17 dollar, clocked at Rs397.4 billion.
SBP Restrictions plunging Local Auto Industry
Import curbs inflicted by the State Bank of Pakistan have shattered the local auto industry. Car makers are announcing consecutive production cuts and price hikes. Meanwhile, along with the industry’s massive downfall, the prevailing economic bust in the country has pushed down the Toyota IMC production capacity to 40-50%.
The company holds SBP’s import hurdles responsible for the ongoing production downturn during its recent Corporate Briefing Session (CBS). Toyota IMC also revealed that these import curbs will be stretched for the next few months.
IMC added that it has filled booking slots for the next 3 months, and 300-400 customers have dropped their booking and recieved the amount back with markup – again due to State bank’s import embargo. Similarly, restriction on car loans has reduced auto financing from 35% to 10% in the last few months.
The company has stated that it can reduce the lead time to 4-5 weeks after the restrictions are eased or lifted. Moreover, it also has plans to launch their first hybrid car in Pakistan and invest $100 million in the Hybrid electric vehicle (HEV) sector.
What do you think about the SBP curbs affecting Pakistan’s auto industry? Share your thoughts in the comment section.