Like the entire car industry, Toyota Indus Motor Company (IMC) is struggling due to the ongoing economic situation in Pakistan.
A recent report suggests that the company is considering suspending its production and assembly operations from August 1-14, 2022, due to the non-approval of Letters of Credit (LC) from the State Bank of Pakistan (SBP).
A company official told Dawn that IMC will slash its production due to several issues including local currency devaluation, tax rate hikes, increase in shipping costs, and raw material costs.
He added that the company had to suspend production between July 1 and 17 as well due to slow imports around the Eid holidays. It isn’t booking new cars since May 18 due to the volatility of the currency exchange rate and the non-opening of LCs. IMC is also considering refunding customers that had previously booked cars, the source told.
The report adds that several automakers are considering suspending production due to the aforementioned concerns as well as the late arrival of parts.
Public Accounts Committee (PAC), meanwhile, is blaming the automakers for failing to localize their parts production, despite being in the market for decades.
In the last meeting, PAC learned that car companies have collected payments in advance worth Rs. 189 billion from the customers. Despite that, the customers are facing delivery delays.
The report highlighted the following company-wise breakdown of the advance payments collected by carmakers:
- Toyota IMC — Rs. 99.2 billion
- Pak Suzuki Motor Company (PSMC) — Rs. 35.4 billion
- Honda Atlas Cars (HACL) — Rs. 21.8 billion
- Master Changan Motors (MCML) — Rs. 11 billion
- Kia Lucky Motor Corporation Ltd (KLMCL) — Rs. 10.6 billion
- Hyundai Nishat Motor (HNMPL) — Rs. 6.9 billion
- Al-Haj Automotive — Rs 1.7 billion
- Ghandhara Nissan Limited (GNL) — Rs. 1.6 billion
- Sazgar Engineering Works Limited (SEWL) — Rs. 0.7 billion
- Regal Automobile — Rs. 0.3 billion
The car industry of Pakistan is going through a tumultuous phase that seemingly isn’t going to stabilize anytime soon.
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