Mansoor Sadiq

The shutdown in Pakistan’s automotive sector has started impacting other associated industries, WealthPK reported. Following the closure of leading automotive manufacturers and assemblers in the country including Indus Motor, Honda and Suzuki, General Tyres & Rubber (GTR), a famous tyre manufacturer, has announced production closure in Pakistan citing shortage of imported material and prevailing operational issues.

The GTR said in an official notification that the company will suspend production operations initially for one week due to shortage of inventory caused by import restrictions. It said General Tyres will continue to manage the situation for future course of action depending on the stabilisation of the aforementioned factors. The company has announced that the production has been closed due to economic crisis and inventory issues. “The company continues to face immense hurdles towards importing raw material and obtaining clearance of consignments from commercial banks,” reads the notification.

Highlighting the issues facing the country’s automotive manufacturers, Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) and Pakistan Automotive Manufacturers Association (PAMA) have also recently dispatched a joint letter to the SBP, saying that the industry is on the verge of closure due to import restrictions and increased production cost on account of depreciation of rupee against dollar.

Hussain Kuli Khan, CEO of General Tyres, said the government should allow the opening of letters of credit (LCs) for raw material import. Faad Waheed, Senior Vice President of Islamabad Chamber of Commerce and Industry (ICCI), told WealthPK that the automotive industry in the country has been facing a difficult situation on account of import restrictions and increased production challenges. He said that inflation has hit hard almost all the sectors of the national economy and burdened the public with survival challenges. He urged the government to bring an emergency plan to control the dollar shortage and other main factors hitting hard the national economy.

Faad added that following the closure of industries, unemployment ratio has increased, and everyone is looking towards the government to bring an end to the uncertain political and economic situation in the country. All car manufacturers and assemblers in the country have also raised prices of their respective products multiple times in a single month citing depreciation of rupee.

Honda Atlas, in a recent notification, raised prices of vehicles third time in 2023 by up to Rs550,000. The prices of Honda cars have also been increased by up to Rs1.65 million in 2023 as the company earlier raised prices on January 23 and February 06, 2023, respectively. Similarly, Indus Motor has also raised the prices of its different variants. According to data released by PAMA, car sales decreased by 65% in January 2023 to 6,021 units against 16,985 units in January 2022.

In January 2023, sales of 1000cc cars including Suzuki Cultus and Suzuki WagonR reduced massively in comparison to the same month last year. Suzuki company also pointed out that any Alto vehicles had not been produced owing to the unavailability of raw material in January 2023.

Credit: Independent News Pakistan-WealthPk