Indus Motor Company (IMC), the assembler of Toyota-brand automobiles in Pakistan, announced that it will completely shut down its production plant from December 20 to December 30, citing its struggle with delays pertaining to approval for imports.

The automaker shared the development in a notice sent to the Pakistan Stock Exchange (PSX) on Monday.

The company said the State Bank of Pakistan (SBP) introduced in May a mechanism, via a circular, for obtaining prior approval for import of Completely Knocked Down (CKD) kits and components of Passenger cars (HS Code 8703 category) for the auto sector.

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“(However) the delay in aforesaid approvals for the company and its vendors has created hurdles in import and clearance of consignments for raw materials and components of the company,” said the company in the notice.

“This has resulted in insufficient inventory levels and consequently created an adverse impact on the supply chain and production activities,” the company said, adding that it is unable to continue its production activities.

“In the light of the above, the company has decided to completely shut down its production plant from December 20, 2022 to December 30, 2022 (both days inclusive),” it said.

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The country’s auto industry, highly dependent on imports, has been caught in the midst of an exchange-rate crisis, as the SBP, after unabated rupee depreciation, imposed restrictions on opening of Letters of Credit (LCs).

Last month, officials of IMC in a corporate briefing session said import restrictions imposed by the central bank and ongoing rupee depreciation are denting the country’s auto sector.

Officials at the time said that the industry is bearing the burden of escalating production costs on account of rupee depreciation, while demand has declined due to the economic downturn amid high interest rates and augmented duties and taxes on vehicles.

They called for the removal of import restrictions as they said that auto sector only comprises 3% of the total import bill.

In August, IMC had also announced to temporarily shut down its production plant from September 1, 2022, to September 16, 2022.

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