The economic turmoil in Pakistan is affecting everyone, including major automobile companies like Pak Suzuki and Toyota Indus Motor Company (IMC). In fact, IMC recorded its worst monthly sales figure in almost three years, with only 1,803 cars sold last month. The decline in sales is due to intermittent production shutdowns and the unavailability of completely knocked down (CKD) kits, which the automakers blame on the reluctance of the State Bank of Pakistan (SBP) to approve letters of credit (LCs) for the clearance of imported goods.
Similarly, Honda has also decided to shut down vehicle production for over 20 days due to disruption in the supply chain caused by economic deterioration and restrictions on raw materials and CKD imports. The auto industry is heavily reliant on imports, which is causing delays and inventory rate hikes due to the devaluation of the Pakistani Rupee and SBP’s restrictions on LCs.
Overall, the local automobile industry is suffering and recording low sales figures, making it clear that no one is safe from the ongoing economic challenges in Pakistan.