Amid ongoing economic meltdown and prevailing uncertainty in the local auto industry, Pak Suzuki, one of the affectees faced the worst, came with another production cut.
Citing a shortage of inventory, the company has announced to halt the production of bikes for almost three weeks or 19 days. In an official notification, Pakistan Suzuki Motor Company (PSM announced that the bike assembly plant would remain closed from May 23 to June 10.
Auto Industry Marking a Historical Low
Rupee depreciation, depleting foreign exchange reserved following the not-well-thought financial policies of the incumbent government, steep rise in inflation, and above all, the infamous ‘Import Embargo’ inflicted by the State Bank of Pakistan has not only ruined the country’s car industry but has also urged the car makers to lay off thousands of workers.
Dwindling Car sales, persistent production cuts, and 10th consecutive drop in car financing in the face of burgeoning interest are episodes narrating the whole series of this historical low.
Data released by the State Bank of Pakistan (SBP) revealed that auto loans dropped by 16% last month to Rs. 308 billion compared to Rs. 368 billion in June 2022. Highlighting month-over-month charts, car financing decreased by 2.83%. Car leasing by private banks has observed a slump in the face of the rising SBP policy rate, which is currently 21% against 7% in March 2020.
Even the auto parts industry is not getting a positive response. While talking to Arab News Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) chairman Munir Karim Bana addressed the reservation stating, “We were profitable and paying taxes to the state as all our sales are documented and tax paid. But we are bankrupt now, and there is hardly any chance of revival of our industry in the coming years.”
What do you think, when this series of production shutdown will conclude? Drop your thoughts in the comments section.
