The situation for local car industry seems to get worse with every day as no good news is coming from the sector. And there are multiple reasons for that like devaluation of rupees against the US dollar, economic instability , non-issuance of Letter of Credit (LC) by State Bank of Pakistan (SBP) and political uncertainty among others.
And due to these reasons, especially LC, the companies are suspending the bookings halting their production in coming days, meaning there will be further delays in deliveries.
The auto industry was the focus of discussion during Public Accounts Committee (PAC) last week. During the meeting, the PAC was informed that Rs. 189 billion have been deposited by customers as advance payment to 10 car companies.
Here is the breakdown of this huge payment:
- Toyota Indus Motors (IMC) – Rs99.2 billion
- Pak Suzuki Motors Company Ltd (PMSCL) – Rs. 35.4 billion
- Honda Atlas Cars (HACL) – Rs. 21.8 billion
- Master Changan Motors – Rs. 11 billion
- Kia Lucky Motors – Rs. 10.6 billion
- Hyundai Nishat Motors – 6.9 billion
- Al-Haj Automotive (Proton Pakistan) – Rs. 1.7 billion
- Ghandara Nissan Limited (GNL) – Rs. 1.6 billion
- Sazgar Engineering Works Limited (SEWL) – Rs. 0.7 billion
- Regal Automobile – Rs. 0.3 billion
The PAC was also told by an automaker that government had asked the assemblers if they could not deliver the vehicles on time why they are taking a huge number of bookings from the customers.
Halting Production
As we have told you that IMC would stop the production temporarily by next month, mainly due to LC issue. And following suit, Kia Lucky Motors has also opted for three to four non-production days (NPDs) in the current month and it is also planning to operate in a single shift, if the issue of LC remain unresolved.
Meanwhile, Honda has also observed 1-2 days of NPDs in current month due to Eid Holidays. However, the company has no plans for future NPDs.
Hopefully the car industry will come out of these bad situations soon and production and deliveries would resume.
What do you think about these issues? Please share your thoughts in the comments section.
Well, I.M.C. has announced to refund the money taken by it in the name of advance payment for booking the vehicle so that is one name that should have been written under some other list. Hopefully, the situation is going to be ended soon in an amiable manner that suits every stakeholder.