Auto Makers Aren’t Changing Production Plans Despite Fear of Declining Sales

The government recently banned purchasing property worth over Rs 5 million and the purchase of vehicles by non-filers. The ban will come into effect from 1st July 2018 and a sudden drop in auto sales is expected by the manufacturers. However, the ban won’t be impacting the local auto assemblers who still plan to manufacture vehicles to their maximum capacity until September 2018.

Toyota and Suzuki are expecting a bigger dent in sales as most of their buyers belong to rural areas where people normally don’t file tax returns.

The three major auto assemblers in the country – Toyota, Honda, and Suzuki – have already stopped taking orders from the non-filers.

The companies have further advised their customers to register as tax filers to avoid any hassle or delay in their orders.


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The Production

As per the reports, the decision to put a ban on non-filers hasn’t made any real impact on companies’ manufacturing plans. The reports add that following production numbers will be seen over the course of new few months:

  • 4,300 units of Toyota Corolla to be assembled in June. The number will stand at 5,700 in July, 4,600 in August, and 5,100 in September.
  • 3,200 units of Suzuki Mehran will be produced in June followed by 4,800 in July, and 4,000 in August. Another 1,400 units of Suzuki Pickup will be assembled in June while July and August will see an addition of 1,700 units each.
  • 1,500 units of Honda City will be made in June, 2,700 in July, 2,000 in August, and 1,900 in September.
  • Honda Civic model will also see an addition of 1,400 units in June, 1,900 in July, 1,300 in August, and 1,900 in September.

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Senior Vice Chairman PAAPAM Mohammad Ashraf Shaikh told;

The schedule of procuring parts and accessories by the three assemblers has not shown any sign of a drop. Assemblers’ production plans until September are more or less same so far as per parts procurement schedule received by the vendors.

Indus Motor Company’s representative told that so far there is no change in the production plan as the company has to clear pending orders for July and August. The representative further added:

The industry has asked the government to exempt those orders of non-filers which were booked prior to the decision so that vehicles could be easily delivered in July-August 2018.

The import bill for SKD (Semi Knocked Down) and CKD (Completely Knocked Down) also increased year-on-year. The current CKD/SKD imports stand at $655 million for July-April period as compared to last year’s figures of $532 million for the same time period.

Via Dawn