Baluchistan Wheels Limited (BWHL), an auto parts manufacturer, has extended production closure until January 6, 2022, due to low demand. The company shared the development in its notice to the Pakistan Stock Exchange (PSX).
The statement read:
As explained earlier vide our letters dated December 09, 2022, and December 23, 2022, regarding temporary closure of production activities due to a drop in our sales orders from the OEM’s [Original Equipment Manufacturers] owing to depressed demand of autos. It hereby further informed that closure of production activities of the company shall continue till Friday, January 06, 2023.
BWHL makes and sells automotive wheel rims for trucks, buses, tractors, cars, and mini-commercial vehicles. It announced earlier this month that it would stop production from December 12 to 23 due to low auto demand. Later, the company prolonged its closure of production activities till December 30.
Likewise, Pak Suzuki Motor Company Limited (PSMCL) also decided to completely shut down its plant for both automobiles and motorcycles from January 2, 2023, to January 6, 2023, due to an inventory shortage.
Toyota Indus Motor Company (IMC), also did the same for its production plant from December 20 to December 30, citing its struggle with delays pertaining to approval for imports.
A Possible Relief?
The country’s auto industry, highly dependent on imports, has been caught in the midst of a crisis, as the SBP, after unabated rupee depreciation, imposed restrictions on the opening of Letters of Credit (LCs).
Recently, however, SBP eased the import sanctions on Completely Knocked Down (CKD) kits for local car assemblers. In an official notification, SBP stated that the central bank has decided to undo the import restrictions from January 2, 2023.
The decision is to allow for the acceptance of import transaction requests already filed with the SBP. The removal of import sanctions may enable car companies to reinvigorate their production and sales, provided they don’t increase the prices further.
