Toyota and Suzuki, the two major car assemblers have announced that they will partially shut down their car assembling plants in August due to the unavailability of raw material. This happened because Shahbaz Sharif’s government-imposed ban on imports. Besides this, both car assemblers took this decision because of the historic increase in US Dollar rate as it has touched 236.02 as per SBP official numbers.
According to the official press release of TOYOTA, “ This decision is being taken due to unforeseen devaluation of the Pakistani Rupee, coupled with the Government restrictions, including the LC approval constraints rendering it impossible to import CKD kits without prior permission, and the continuing financial instability have led to a force majeure situation.”
TOYOTA’s Official press release further added that “Due to the current conditions, IMC’s production has been radically disrupted and we are unable to produce the requisite units as per full capacity, resulting in the delay in tentative delivery schedules.”
As per official statements of car assemblers, the State Bank of Pakistan did not provide the clearance letters timely due to a shortage of dollars being faced by banks. Due to said reason, car assemblers are unable to import materials.
While talking with Reuters, Ali Asghar Jamali, Chief Executive of Indus Motor Company Ltd said “There will be 10 working days next month, only if the central bank allows us to open letter of credit based on the quota they promised.”
On the other side, Pak Suzuki also expressed similar concerns. “Restrictions had adversely impacted clearance of import consignments from ports,” the head of public relations for Pak Suzuki Motors, Shafiq A. Shaikh, said. Shafiq further added that the unavailability of materials may result in a plant shutdown in August.