KARACHI, Nov 14: Japanese car assemblers after rescheduling their production plans have revised their parts procurement schedule from their local vendors for November-December period in view of crisis-like situation in the country after the imposition of emergency.
Out of three car Japanese makers, the leading producer which enjoys 55 per cent market share appears highly alarmed over the uncertain political and economic situation.
Other car manufacturers also reported to have slashed the supply order of parts and accessories from their vendors by 40-50 per cent for November and December.
Pak Suzuki Motors Company Limited (PSMCL) on Wednesday in a letter to all its vendors (parts producers) had stated that imposition of emergency and unstable political conditions had huge negative effects on overall economic activities which also resulted in crash of stock markets.
Auto industry is no exception and currently the company is facing major crunch on its two models Liana and Cultus, the company stated in the letter.
Pak Suzuki requested its vendors for deferment of balance supplies for the remaining days of November till further communication from the company. The letter said that the arrangement of supplies for December 2007 as per revised schedule would be issued next week.
In the meantime, the company said its supply chain division had started re-generating the schedule for December and were also working out the net requirement for November, if any, would be communicated to the vendors.
The company has called upon an emergent meeting with its vendors on Thursday to apprise them about the revised production plans and to discuss the ways to come out of this crisis situation.
As the Pak Suzuki seeks apology and cooperation from their vendors, one of the main parts providers said that the abrupt decision of the Japanese assembler would create serious financial problems for the vendor industry.
He said those vendors who had already procured six months raw material in stock would face severe financial problems, while those who had taken heavy loans from banks for plant expansion would bear heavy losses.
He urged the car makers to provide support to the vendors to overcome the crisis situation.
He said that the car makers had been making frequent requests to the vendors for the last two years to reduce the prices of parts otherwise they would either take them from alternate sources or suspend placement of orders. He added that why local manufacturers had been reluctant in reducing car prices despite making profits during the last two to three years.
The vendor said that the Japanese car makers had taken the decision after smelling possible downward trend in demand of cars for the next two months in view of election atmosphere and the emergency.
It may be noted here that a foreign news agency had reported that Japan had also warned on Tuesday that it may cut aid to Pakistan after the military regime declared emergency rule and placed a key opposition leader under a house arrest.