Automakers in Pakistan announce temporary shutdowns as economic woes bite

The inability to procure much-needed raw materials and dwindling demand continued to bite Pakistan’s auto sector, resulting in companies announcing temporary shutdown of operations.

Pak Suzuki Motor Company (PSMC) announced on Wednesday another shutdown of its automobile plants amid inventory shortage.

In its notice to the Pakistan Stock Exchange (PSX), PSMC said: “Due to shortage of inventory level, the management of the company has decided to shut-down automobile plant from November 06, 2023 to November 08, 2023.”

However, PSMC said its motorcycle plant will remain operative.

During the course of the year, the Japanese automaker has announced shutdowns over a dozen times. Last week, it said it would keep its automobile plant shut till November 3.

It made similar announcements in October, September, August, June and May as well, citing a lack of raw material.

Last month, the Board of Directors (BoD) of PSMC decided to purchase all outstanding shares of the company and delist from the PSX, citing low valuations and losses.

Meanwhile, Agriauto Industries Limited, a manufacturer of auto parts, on Wednesday announced it will observe a partial shutdown this month.

“Due to reduction in production volumes of our major customers, the company will be observing partial shutdown during the month of November 2023,” Agriauto said in a notice to the bourse.

It added that Agriauto Stamping Company Pvt. Ltd., the wholly owned subsidiary of the company, will also observe partial shutdown in November 2023 owing to similar reasons.

Agriauto made a similar announcement in October as well.

Its clients include Suzuki, Toyota and Atlas Honda, which currently struggling and have shut down plant operations on multiple occasions as the sector deals with inventory shortages due to import restrictions.

A number of automakers including Indus Motor Company, and Honda Atlas have also announced temporary shutdown of operations in recent weeks.

The country’s auto sector, hugely dependent on imports, has been hit hard by the government’s decision to curb imports and restrict issuance of LCs. Additionally, higher finance cost and massive increase in car prices have also reduced demand from consumers.