The import of auto parts decreased by 36.6 percent to $258 million in July-September 2022 from $407 million during the same period last year. This is a direct result of the State Bank of Pakistan’s (SBP) sanctions on the auto sector to reduce the demand for automobiles.
To help clear imported consignments of auto components, the central bank has been offering foreign currency at a rate of 50-70% since July. Despite that, however, the imports are still stagnant.
Pak Suzuki Motor Company (PSMC) kept its production plant closed for 28 days from August to October due to supply chain disruption and low inventory levels. This included a five-day closure for periodic maintenance.
Likewise, Toyota Indus Motor Company (IMC) observed a 29-day plant shutdown from August to September, and Honda Atlas Cars Limited (HACL) saw a 12-day closure in October.
Toyota IMC stated in its recent corporate briefing session that car financing has dropped from 35% to just 10% in recent months due to car loan restrictions from SBP.
IMC added that it has bookings filled up to the next 3 months, as per the current pace of production. It added that almost 400-500 of its customers canceled their bookings and were refunded the amount with markup.
The automaker has cautioned that the local automotive industry’s troubles such as rising inflation, supply chain hiccups, production cuts, and import restrictions may also spark an exodus of some new carmakers from Pakistan.
The company mainly holds SBP’s restrictions on automotive imports as the main culprit for most issues.
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