Indus Motor Company Limited (INDU), the company known for assembling and selling Toyota-brand vehicles in Pakistan, has announced the temporary shutdown of its production plant from March 24 to March 27 due to raw material and component shortages.
In a notice to the Pakistan Stock Exchange (PSX), Indus Motor cited difficulties in opening Letters of Credit (LCs) for raw materials by banks, which have caused a disruption in the supply chain of the company and its vendors.
As a result, the company is unable to continue its production activities due to insufficient inventory levels. This is the second time this year that Indus Motor has announced the shutdown of its plant, with the first being from February 1 to February 14 due to an inventory shortage.
The CEO of Indus Motor, Ali Asghar Jamali, had previously acknowledged the challenges facing the local auto industry, including the restrictions on Completely Knocked Down (CKD) kits, which have resulted in manufacturers operating at only 40-45 per cent of their capacity.
The auto industry in Pakistan is heavily reliant on imports and has been affected by the State Bank of Pakistan’s (SBP) restrictions on the opening of LCs, following a sharp depreciation of the rupee.
The SBP has imposed restrictions on imports due to the country’s low foreign exchange reserves, which has resulted in operational hindrances for many industries, including the auto sector.
Although the SBP withdrew import restrictions in January, many industries are still struggling due to the dollar shortage.
