Indus Motor Company, the assembler of Toyota automobiles in Pakistan, has decided to shut production from August 25, 2023 to September 06, 2023, citing drop in demand amid lower purchasing power.
The company announced the development in a notice to the Pakistan Stock Exchange (PSX) on Thursday.
“In fiscal year 2022-2023, due to challenging economic environment, low consumer purchasing power and increase in duties and taxes by the Federal Government, the demand for auto sector has continuously declined,” read a statement.
“While considering the low demand and inventory levels, the company has decided to close its production plant from Friday, 25 August, 2023 to Wednesday, 6 September, 2023 (both days inclusive),” it added.
Despite securing a last-minute deal with the International Monetary Fund (IMF), industries and consumers in Pakistan are still facing the economic woes they faced head-on earlier.
A string of companies from various sectors – Sitara Peroxide, Pak Suzuki Motor Company among others – had earlier announced production shutdowns, citing various reasons ranging from demand to supply-side constraints.
The country’s auto sector is especially facing economic headwinds, including the sector inability to secure Letters of Credit (LCs) needed for imports.
In addition to the LC issue, the sector is also faced with depressed demand due to higher prices and record-high interest rates. A falling rupee is not helping either.
Car sales dropped by whopping 57% year-on-year (YoY) in the first month of the fiscal year 2023-24, as per data given by Pakistan Automotive Manufacturers Association (PAMA).
The registered car manufacturers with PAMA cumulatively sold only 5,092 units in the month of July.
The month-on-month (MoM) decrease stood at 16%, as per the data.