Citing the import restrictions in Pakistan, Suzuki Motor Company Ltd (PSMC) has decided to keep its car and bike plants in Pakistan closed from 22 June to 8 July. In the statement to the Pakistan Stock Exchange, the company said that the decision was taken due to a shortage of parts and accessories, news agency PTI reported citing local reports on Tuesday.

The closure of plants by Suzuki Motor is happening shortly after it restarted its four-wheeler unit in Pakistan, which had been closed for a period of 75 days. The closure is attributed to the challenges faced by the Japanese auto major in imports due to a mechanism implemented by Pakistan’s central bank in last May.

In May 2022, the State Bank of Pakistan (SBP) mandated the companies to obtain prior approval for importing completely knocked-down kits. This policy had a negative impact on the clearance of shipments, subsequently affecting inventory levels.

Additionally, the Suzuki Motor has been grappling with a persistent shortage of raw materials for approximately a year. As a result, their four-wheeler plant, known as PSMC, remained closed for a duration of over 75 days, spanning from August 2022 to 19 June, the reports added.

“Due to shortage of inventory level, the management of the company has decided to shut down motorcycle and automobile plants from June 22 to July 8, 2023,” the company said.

The automotive industry is one of the sectors significantly impacted by the prevailing economic conditions in Pakistan. The Pakistan Automotive Manufacturers Association has claimed that in May 2023 the car sale in Pakistan witnessed a 80% (year-on-year) decline.

Importers have been encountering challenges in obtaining letters of credit (LCs) due to the country’s limited foreign exchange reserves, which have been strained by financial difficulties.

The industry has experienced a sharp decline in car sales due to the ongoing economic downturn and the reduced purchasing power of consumers caused by soaring inflation rates. In response to import restrictions, various companies, including Indus Motor Company, have declared several temporary closures.

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