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Toyota, Suzuki to curtail production in Pakistan

Toyota, Suzuki to curtail production in Pakistan

Toyota, Suzuki to curtail production in Pakistan

Toyota, Suzuki to curtail production in Pakistan .

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  • Toyota and Suzuki intend to shut down portions of their plants next month.
  • Lack of raw materials due to import restrictions and fluctuating exchange rates.
  • Less than two months’ worth of imports may be covered by the $9.3 billion in reserves held by the central bank.
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Toyota and Suzuki, Pakistan’s two largest automakers, intend to shut down portions of their plants next month due to a lack of raw materials due to import restrictions and fluctuating exchange rates, officials at both businesses said on Wednesday.

Since the rupee has lost almost 20% of its value this year as a result of declining foreign reserves, a weakening currency, and a growing current account deficit, the government has tried to reduce imports.

Industries that rely on imports to complete finished items claim the central bank’s action has delayed the clearing of letters of credit, causing banks to run out of dollars and limiting their capacity to import raw materials.

According to Ali Asghar Jamali, CEO of Indus Motor Company Ltd, which assembles Toyota vehicles in Pakistan, “there will be 10 working days next month, but only if the central bank permits us to create a letter of credit based on the quota they promised.”

Due to the lack of dollars in the country, he claimed that the company was issuing refunds to customers who had experienced delays and markups on their payments.

Deliveries were also expected to be delayed by at least three months.

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Less than two months’ worth of imports may be covered by the $9.3 billion in reserves held by the central bank.

Due to record-high imports, the current account deficit for the most recent fiscal year reached 5% of GDP.

The attitude was shared by Pak Suzuki, which assembles Suzuki automobiles locally and cited the central bank’s new system for prior approval for imports.

Shafiq A. Shaikh, the head of public relations at Pak Suzuki Motors, stated that restrictions had a negative influence on the clearance of import consignments from ports.

He stated that a plant closure in August could occur due to a lack of materials.

Shaikh warned that if the current trend continues, there will be serious issues starting in August 2022.

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Requests for comments were not answered by the State Bank of Pakistan.

According to data from the Pakistan Automotive Manufactures Association, the sale of locally produced cars in Pakistan increased by about 50% between July 2021 and May 2022 compared to the same time the previous year.

 

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