IMC to keep its production plant closed in September

Toyota Indus Motor Company (IMC) has halted its vehicle production completely for the rest of the month of September 2019 due to considerable fall in demand and piled-up unsold inventories.

According to the details, the auto manufacturer has decided to keep its production plant closed from 20th to 30th September. The closure of the company’s production also makes the total tally of non-production days (NPD’s) to 15 in this month only. The news was also confirmed by an official of a local authorized dealership. The automaker is observing the non-production days for the last two months, and the situation is getting worse day by day. In July 2019, IMC halted its production for as many as eight days while the number jumped to 12 non-production days in the month of August. It has now gone further one step ahead as the production plant records 15 days of closure in September.

The country is going through an economic slowdown process, and the local auto industry is suffocating in this situation. The local currency has devalued so sharply against the US dollar, which left a huge impact on the prices of all automobile products in the market. A majority of auto parts and raw material used in the production of vehicles are imported, and under the current rate of the dollar, their cost has gone beyond limits. Furthermore, the government, instead of improving the situation, also watched the industry suffer. Perhaps it decided to impose new taxes and duties on vehicles to worsen the situation. For instance, the imposition of Federal Excise Duty (FED) resulted in a massive increase in the prices of automobiles. Later on, the government expanded the FED circle and imposed it on all categories of vehicles at 2.5% – 7.5% in accordance with the engine capacities. The additional customs duty on imported parts and high rates of interest sky-rocketed the prices of vehicles beyond the reach of the end consumer.

According to the sources, the nationwide dealership network of IMC is struggling in selling vehicles. More than 3000 vehicles of Toyota have piled up in the unsold inventory. As a result, the production plant is also kept running at 50% of its capacity. The fiscal year 2019-20 has started poorly for all the auto manufacturers in the country. Toyota IMC managed to sell only 3708 units of its hot-selling Corolla in the first two months, i.e. July and August 2019 as compared to 8770 units in the corresponding period last year thus recording a massive decline of 57.7%. In the same way, the sales of Toyota Hilux also dipped by 44.6% during the same period under review. The company sold only 716 units of Hilux as compared to 1292 units last year. Its SUV Fortuner also suffered in this period with a decline of 61.8% in the sales from 424 units last year to only 162 units in the first two months of FY 2019-20. Keeping in view a massive decrease in car sales, the company has also decreased its production to nearly 50%. The sales stats are taken from the PAMA website.

Unsold units of Honda Atlas

Note here that same is the case with Honda Atlas as it’s also observing the non-production days every month. Pak Suzuki initially announced no reduction in its production, but that didn’t last too long. It has now notified all its authorized dealers across the country to temporarily suspend the bookings of some variants of all its vehicles. The list includes the following variants of their vehicles:

Even the newly launched 660 cc Alto is among those temporarily suspended for booking, which shows the clear picture of economic crisis. The government needs to quickly take action before the local auto sector collapses completely. The additional taxes and duties such as FED should be withdrawn immediately to give the industry some space to breathe. Otherwise, the situation will only deteriorate in the future.

Share your thoughts in the comments section below and stay connected with PakWheels for more updates on the automobile industry of Pakistan.

Exit mobile version