KARACHI: Pak Suzuki Motor Company Limited (PSMCL) has decided to cut the number of production days in August due to shortage of parts following restrictions on their import imposed by the State Bank of Pakistan.

When contacted, PSMCL public relations head Shafiq Ahmed Shaikh said the company had already stopped booking of vehicles from July 1 due to an expected reduction in the number of production days in August.

Without giving any specific dates of non-production days (NPDs) next month, he said currently commercial banks were not opening letters of credit for completely knocked down (CKD) kits. Unavailability of CKD kits and related raw materials may result in plant shutdown next month, he added.

Mr Shaikh said there would be big problems in August if the same situation persisted and resuming the booking of vehicles would depend on normalisation of LCs opening. He said the State Bank’s restrictions on opening LCs had affected clearance of import consignments from the port.

He said Pak Suzuki had continued production in July this year by adjusting production plans. “We are trying to deliver all vehicles that were booked till June.”

Company has already stopped booking of vehicles this month

Pak Suzuki had sold 150,279 units during the outgoing fiscal year (FY22) compared to 88,032 units in FY21, showing a jump of 71pc. Sales in June hit 16,009 units compared to 12,212 units in May.

Parts maker/exporter and director of Mehran Commercial Mashood Ali Khan urged the auto assemblers to announce NPDs simultaneously so that parts manufacturers could also make plans accordingly. He said parts makers were facing problems in meeting their overheads and expenses due to the gap in announcement of NPDs by the car assemblers.

Mr Mashood said the government should focus on resolving the economic crisis caused by the uncertain exchange rate rather than handling political issues, adding that it should form a team of economic experts that could plan strategies to solve the problems being faced by the country’s trade and industry.

Indus Motor Company also kept its production shut for two weeks in July and planned NPDs for the first two weeks of next month.

The makers of Kia vehicles also opted for three to four days of NPDs in July, besides closing down the plant on Saturdays.

Despite tightening of auto financing by the State Bank from the third quarter of 2021 and further curbs in the last few months, auto financing increased to Rs368 billion in June this year, depicting a jump of 19.4pc year-on-year and 0.32pc month-on-month due to the orders made a few months back.

Published in Dawn, July 27th, 2022