Indus Motors Company (IMC), the maker of Toyota vehicles, has decided to shut down its production plant in the country from December 20-30, citing a delay in import approvals from the State Bank of Pakistan (SBP).

In a letter addressed to the general manager of the Pakistan Stock Exchange, the IMC management said that the central bank had introduced a new mechanism for obtaining prior approval for the import of “CKD kits and components of passenger cars (HS Code 8703 Category)” for the auto sector.

“The aforesaid delay in the approvals for the company and vendors has created hurdles in the import and clearance of consignments for raw materials and components of the company.

“This has resulted in insufficient inventory levels and consequently has created an adverse impact on the supply chain and production activities,” the letter stated, adding that the company was hence unable to continue its production activities.

Earlier, a Dawn report said that auto assemblers had to undertake non-production days after May 20 onwards due to restrictions imposed by the SBP through which the bank introduced a mechanism of prior approval from SBP for the import of a few goods including CKDs.

Assemblers said that the decision had been causing a delay in payments to foreign suppliers thus creating huge business risk for local industry.

“These restrictions have so far delayed the foreign payments of about $25m resulting in loss of investor’s confidence in the Pakistani market, and any further delays in the approvals by SBP would result in the loss of $80m contribution to the exchequer,’’ they added.

They said development activities for various new models were in the process across the industry. For new technology vehicles and parts development, the assemblers and vendors need to import machinery, molds, tools and fixtures. For the smooth development of local parts, the trial activities are to be conducted months before the start of mass production.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

World Cup squad
24 Sep, 2023

World Cup squad

THE stress was on continuity — trusting and backing players who had been with the team — as Pakistan’s squad...
Mirwaiz freed
Updated 24 Sep, 2023

Mirwaiz freed

It is safe to assume that the release of Mirwaiz Umar Farooq could not have been possible without the green light from New Delhi.
Beyond lip service
24 Sep, 2023

Beyond lip service

UN SECRETARY GENERAL António Guterres did not mince words at the recently held Climate Ambition Summit: “Humanity...
IMF chief’s advice
Updated 23 Sep, 2023

IMF chief’s advice

Pakistan's prolonged fiscal deficit, surpassing 7pc, stems from the government's reluctance to widen the tax base.
No closure
Updated 23 Sep, 2023

No closure

WHAT is a Pakistani life worth in the eyes of the state? Clearly not enough, if one were to draw a comparison with...
Missing footballers
23 Sep, 2023

Missing footballers

IN the nation’s living memory, Balochistan’s burns have never run dry. The province has grappled with historical...