KARACHI: In the aftermath of a massive drop in the sales of automobiles since July onwards, the auto part vendors have suspended production rendering a large number of workers jobless.
Bolan Castings Ltd (BCL), the makers of various auto parts of tractors and commercial vehicles, informed Pakistan Stock Exchange (PSX) that it has suspended its production activities from Dec 5 to Dec 23 citing the drop in sales due to a drastic fall in orders from its assemblers.
BCL’s revenue plunged to Rs474 million in 3MFY23 from Rs621m in the same period last fiscal year.
The production activities of Baluchistan Wheels Ltd (BWL), the makers of steel wheel rims for cars, heavy vehicles and farm tractors, will remain suspended from Dec 12-23 due to thin orders from the assemblers, the company informed in a stock filing on Friday. BWL’s revenue dipped 26pc to Rs403m in 3MFY23 from Rs547m in the same period last fiscal year.
Pakistan Association of Auto Parts and Accessories Manufacturers (PAAPAM) chairman Munir K. Bana told Dawn that the situation in the vending industry is alarming as a majority of makers had been operating at half of their capacity due to thin demand from the assemblers which have been declining sales since July this year.
“Most of the auto vendors have retrenched their 30pc of permanent and casual workers and 20pc of the employees are working on reduced salaries,” he claimed.
Import curbs by the State Bank of Pakistan had not only created parts shortage in auto manufacturing but also resulted in huge demurrage and detention charges for late clearance from the port.
BWL Chief Operating Officer Muhammad Irfan Ghani said the tractor industry has been facing a huge drop in production from July onwards due to recent floods, restrictions on parts imports, delays in sales tax refunds and uncertain exchange rates.
In other auto segments, he said he had informed the Ministry of Industries and the Federal Board of Revenue that the average rate of localised parts in various vehicles had been static at 30pc since 2000, he claimed.
Published in Dawn, December 10th, 2022
