As per media reports, the Suzuki Motor Company Ltd (PSMC) has decided to temporarily shut down its car and bike plants in Pakistan. The closure, scheduled from June 22 to July 8, is attributed to import restrictions and their impact on components and accessories. This decision comes shortly after the company resumed operations at its four-wheeler factory in Pakistan, which had been closed for over 75 days.

According to a regulatory filing submitted to the stock exchange, Suzuki Motor Company Ltd (PSMC) has halted its manufacturing operations in Pakistan. The company cited a shortage of parts and accessories, which has been exacerbated by a system implemented by the country's central bank in May of the previous year. The report by Dawn News highlighted this development.

In May of the previous year, the State Bank of Pakistan (SBP) implemented a requirement for businesses to obtain prior approval for importing fully knocked-down kits. This measure had a detrimental effect on the clearance of consignments and subsequently impacted inventory levels, as reported by the Express Tribune newspaper.

The shortage of raw materials has persisted for a year, causing significant challenges for Suzuki Motor Company Ltd (PSMC). As a result, the company had to keep its four-wheeler plant closed for over 75 days from August 2022 until June 19, as per the reports.

"Due to shortage of inventory level, the management of the company has decided to shut down motorcycle and automobile plants from June 22 to July 8, 2023," the company said.

The current economic conditions in Pakistan have affected various sectors, including the auto industry. Importers have faced difficulties in obtaining letters of credit (LCs) due to the country's low foreign exchange reserves.

PSMC reports a 101% growth in May 2023 sales, reaching 2,958 units. Massive layoffs hit Pakistan as consecutive production shutdowns occur. The auto sector sees a significant decline in annual sales, resulting in job losses for 25,000-30,000 workers. Pakistan aims to secure an IMF agreement before the current bailout program ends on June 30.

Image source: The Economic Times