By Staff Reporter
KARACHI: Car assemblers in Pakistan, Toyota and Suzuki, planned plant shutdowns next month as unavailability of raw material amid government’s import restrictions hit productions, officials said.
The coalition government banned the import of over 30 luxury items including cars in a move to help boost the country’s faltering economy.
Cash-strapped Pakistan has been hit by a storm of crippling debt, dwindling foreign currency reserves, a widening current account deficit and galloping inflation.
The rupee currency hit a historic low on Wednesday, with 2xxx rupees fetching $1.
The move was an effort to target the country’s elite, with the banned goods including mobile phones and cars — which make up the largest share of import bills on the list.
The sale of locally assembled cars in Pakistan surged by around 50 percent in the last fiscal year, draining billions of dollars in imports when the country was in server financial crisis.
The move however had a cascading effect on industries that rely on imports to complete assembling of their products.
Auto industry says the central bank has delayed the clearance of letters of credit with banks facing a shortage of dollars, affecting their ability to import materials.
“There will be 10 working days next month, only if central bank allows us to open letter of credit based on the quota they promised,” said Ali Asghar Jamali, chief executive at Indus Motor Company Ltd which assembles Toyota vehicles in Pakistan.
He said the company was offering refunds to customers facing delays and markups on their payments, with deliveries likely to be delayed by at least three months and prices to be revised as the country does not have dollars available.
Pak Suzuki, which assembles Suzuki vehicles locally criticized the central bank’s new mechanism for prior approval for imports.
“Restrictions had adversely impacted clearance of import consignments from ports,” an official of auto assembler said.
“If the same situation continues, then from August 2022 we have big problems (plant shutdown).”
Copyright © 2021 Independent Pakistan | All rights reserved
