Prevailing economic fuss has urged all the automakers to dispel the notion that the episode will end soon. Gaining profile of Rupee and dollar depreciation has warranted no positive reflection because the incumbent government is extending no benefit to automakers – non-issuance of LCs is still alive.
Resultantly, companies are still announcing production cuts. Like all the automakers, Pakistan Suzuki Motor Company is also bearing the brunt of the ongoing economic doom – announces a production halt for two days.
As per company’s notification that PSMC will observe a production halt for two days from August 18 to 19 in the face of delay witnessed in Letter of credit.
Reports have revealed that the State Bank of Pakistan is hesitating to approve the letter of credit for CKD imports which in turn nudged the automakers to cut production days.
Earlier, the same issue compelled Toyota Indus to face production cuts and curtail operational costs to survive.
The New Policy
The new policy by the federal government, which had made prior approval from the State Bank of Pakistan (SBP) for the goods essential, has created severe hurdles for the auto industry. As per details, this mechanism is causing issues in the arrival of completely knocked down (CKD) kits of vehicles along with other major auto industry imports.
The media reports had suggested that a delay in approvals for CKD kits import transactions would cause a production halt for all major car companies by next week. It would also disrupt the entire supply chain, including local vendors and dealers. And after months, we are witnessing the same.
Ban on CBU Imports
Earlier, in an extreme measure to control the rising import bill, the government imposed a complete ban on importing nearly 800 items in 33 categories. Used and new cars were among the banned items.
What do you think about ongoing economic situation and production shutdowns? Drop your thoughts in comment section.
