Assemblers Imported $62 Million Worth of CKDs/SKDs in April

Auto assemblers have imported $62 million worth of CKDs/SKDs in April, as compared to $43m in March and $39m in February, in anticipation of good sales ahead of Eid, according to report published in Dawn. This is an approximately 60% increase in CKD/ SKD imports within the last 2 months.

Related: No Demand for Cars Despite Ease in Lockdowns

Now however, the assemblers are sitting idle with huge parts inventory at their disposal as plants are closed since the 22nd of March due to COVID-19 lockdowns. According to a vendor, the reasons for rising imports of parts and accessories is the introduction of locally assembled new Toyota Yaris sedan just ahead of the lockdown, followed by Suzuki Alto and other new vehicles as assemblers must have imported kits in bulk quantities to cater huge expected demand from April onwards.

The vendor said that the assemblers usually give orders for imported parts, raw material and kits 2-3 months earlier, keeping in view 30 days for arrival of shipments at the port followed by at least 10 days in clearance of goods and advance booking orders from the customers. According to him, the manufacturers made higher imports but did not expect two-month closure under the lockdown.

Related: Assemblers Shrewd Enough to Increase Prices Ahead of Budget FY20-21

However with production & sales remain zero for almost 2 months, and the industry witnessing a 50% decline in sales, Toyota and Honda has increased the prices of their cars by a substantial margin. The move is attributed towards tax cuts in the forthcoming financial budget, sensing which local assemblers have increased the prices to avoid price reductions in the post-budget scenario so as to keep their profit margins in check.

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