Auto plants see partial revival amid confusion

Updated May 29 2020

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Assemblers, who have not started their plants, say they are confused whether to start plant operations or not. — Dawn/File
Assemblers, who have not started their plants, say they are confused whether to start plant operations or not. — Dawn/File

KARACHI: Confusion has gripped the auto industry as some assemblers are freely operating in Karachi on claim of getting official permission, while others are avoiding restarting their operations in the absence of any official notification from the Sindh government.

Pak Suzuki Motor Company Limited (PSMCL), which enjoys over 50 per cent market share in cars, has yet to resume operations at its assembly plant, a company official said on the condition of anonymity.

The bike plant is also shut.

“We cannot run the plants without any official notification,” the Suzuki official said.

Meanwhile, the Indus Motor Company (IMC), the assembler of Toyota vehicles, has resumed its plant operations.

The spokesman of IMC claimed that “the whole auto sector has received the permission.”

“We are on trial production. Full production will start after June 7. All dealers and parts suppliers have started work too,” he added.

IMC had informed the Pakistan Stock Exchange (PSX) on May 19 that its management has decided to resume operations at its plant and offices, with measures to prevent the spread of Covid-19.

Atlas Honda Limited (AHL) has also started its Karachi and Sheikhupura plants from May 20 in view of the relaxation allowed to motorcycle industry from current situation of lockdown due to corona virus.

Some listed vendors have also resumed operations. For example, Agriauto Industries Limited had informed PSX on May 19 regarding partial start of its operations of its Hub and subsidiary operations Port Qasim Plants while strictly observing standard operating procedures and other directives of the government.

Other listed manufacturers of vehicles and their vendors have so far not communicated to the PSX regarding opening of their plants.

Hinopak Motor Limited, a leading heavy vehicle assembler and a listed company, has also been closed since second week of March following government’s decision of imposing locked down all over the country to control corona virus.

Two Japanese heavy vehicle assemblers and another bike assembler are also closed.

“Our Japanese principals have strictly asked the local management not to open plants without any official written permission or notification from the Sindh government,” a heavy vehicle assembler told Dawn.

He said many Japanese companies are in a fix as their Japanese management staff is stuck in Japan for over two months due to the pandemic.

Kia Lucky Motors had also started its operation for four days of last week and it also worked on Thursday.

Sales of Kia vehicles had been going at showrooms but less than before locked down. Vendors are fully operating but some of them have supplied parts from their stocks, sources in Kia said.

Another Japanese heavy vehicle assembler said the closure of plants have created a lot of problems. “Delivery of vehicles to the government as well as private customers has been suspended for over two months despite getting partial payments,” he added.

Assemblers, who have not started their plants, said they are confused whether to start plant operations or not as Sindh government would have a valid reason to seal or closed down the plants in case plants are found operating without any official notification.

Contrary to this, Punjab government has already allowed opening of the auto sector and operations have begun.

A Korean heavy vehicle commercial assembler said that he is waiting for official announcement from the Sindh government. “We are incurring huge financial losses and are unable to deliver buses to our customers in Punjab and Khyber Pakhtunkhwa due to the lockdown in Sindh,” he added.

Published in Dawn, May 29th, 2020