Pakistan, which has been facing difficulties regarding the economy in the last few years, has suffered another setback. Pak Sukuzi Motor Company (PSMC), the joint venture partner of Japan’s automobile company Suzuki in Pakistan, has announced the closure of production from January 2 to 6. Earlier this month, Indus Motor Company (IMC), which assembles vehicles for Toyota in Pakistan, decided to stop production from December 20 to 30. The reason for this was the delay in getting permission for import.
The IMC had told that the automobile sector is suffering huge losses due to the restrictions imposed by the Central Bank of Pakistan on imports and the weakening of the currency. PSMC said in a regulatory filing, “The State Bank of Pakistan implemented prior permission for imports a few months ago. This has impacted clearance for imports and reduced inventory. Due to this the firm has 2 from to 6 January Production have decided to shut down.” in Pakistan Suzuki PSMC assembles and markets a range of cars, pickups, vans and motorcycles.
A media report states that due to the exchange rate crisis, difficulties have increased for Pakistan’s automobile industry, which is heavily dependent on imports. Millat Tractors, which manufactures tractors in Pakistan, has also decided to stop production on Friday due to low demand. The automobile industry is facing the challenge of higher production cost due to currency depreciation. Apart from this, the demand is also decreasing due to the deteriorating condition of the economy, high interest rates and high taxes on vehicles.
Experts say that due to high prices of vehicles, the demand has come down significantly. Demand can improve only after the import restrictions are removed and fuel prices are reduced. Most of the fuel requirement in Pakistan is imported. Imports have become costlier due to the depreciating value of the Pakistani currency against the dollar. Inflation is also increasing due to this.