On Thursday, an auto parts manufacturer Agriauto Industries Limited informed the Pakistan Stock Exchange (PSX) that it would partially close its plant in March.
The official notice cited reduced production volumes of its major customers, which include car assemblers, bike makers, and tractor manufacturers. Its clients also include ‘the big three’ of the Pakistani car industry — Suzuki, Toyota, and Atlas Honda.
The carmakers themselves are also facing production closures due to the ongoing economic meltdown. In recent months, dozens of Pakistani industries have shut down, citing market demand and the inability to maintain inventory due to Letters of Credit (LC) issues.
On March 2, the Pakistani Rupee took a nosedive against the US dollar, which opened the floodgates for another wave of price hikes. Recently, Lucky Motor Corporation (Kia and Peugeot) as well as Hyundai Nishat Motors increased the prices of their vehicles.
With the new PKR depreciation update, other automakers are likely to announce price hikes very soon.
The parts manufacturers have been here for decades. Yet almost none are parts exporters in any meaningful way. They are just selling to the local companies.
It’s been decades; The most pertinent question is, why have they not entered the parts export market in all that time?
Why have they been happy selling locally only? Their current business model of only selling locally makes them an expense on the dollar reserve of the nation.
If they had entered the international market they would now be operating at a good capacity just to meet the international demand. And chances are even the government would have been fully supporting them now because they would have been among the few industries which would have been bringing in vital foreign currency to the nation.
Unfortunately as it stands now, all the auto industry companies went down the easy, lethargic route and wasted their time for easy profits only. Now their bad business strategy has caught up with them.
Stop crying! If the plants are closing, it’s their own fault and their employees should ask them about all this. These companies are the most responsible for the current situation. Stop whining and own up to it!
“Chori, upar se seena zori” 😤