The State Bank of Pakistan (SBP) has imposed import restrictions that have negatively impacted the clearance of import consignments, which has in turn affected the inventory levels, according to Pak Suzuki Motor Company (PSMC), which announced on Monday that the shutdown of its auto production plant has been further extended from August 29 to August 31.

The SBP has instituted a procedure for prior permission for imports within the HS code 8703 category (including CKDs), according to a notice given to the Pakistan Stock Exchange (PSX) by PSMC on May 20, 2022, according to pkrevenue.

According to PSMC, these restrictions had a negative influence on the import consignment’s clearance, which in turn had an impact on inventory levels.

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PSMC said that it is experiencing a scarcity of inventory. As a result, the company’s management has decided to further extend the auto plant’s shutdown time from August 29, 2022, to August 31, 2022.

As a result of a decline in inventory levels, PSMC informed the PSX earlier this week that it will halt production of automobiles from August 22 through August 26, 2022.

However, PSMC stated on both occasions that its motorcycle plant will continue to operate.

Due to Pakistan’s auto industry’s reliance on imports and the SBP’s limits on Letters of Credit opening as a result of the persistent rupee devaluation, the country is currently experiencing an exchange rate crisis.

In order to prevent delays in car delivery and future price increases, the manufacturers requested the central bank’s involvement back in July for opening LCs for the import of CKD kits.

PSMC stated earlier this month that it would lower the pricing of its cars by between Rs75,000 and Rs199,000, citing the strengthening of the rupee versus the US currency. Due to the weakening of the rupee, prices had already climbed significantly in early August.