Local Assemblers Have Rs189 Billion as Advance Payments

As Pakistan is experiencing economic crisis scenario, local car industry seems is going through a turbulent period with devaluation of rupees against the US dollar, economic instability, non-issuance of Letter of Credit (LC) by State Bank of Pakistan (SBP) and political uncertainty among others.

With no CKD kits in hand, the companies are suspending the bookings, halting their production to observe non-production days, that will result in further delays in deliveries, while still announcing massive price increases which will be applicable on new orders once the production (assembling) resumes.

Recently, the local auto industry was the focus of discussion during Public Accounts Committee (PAC) meeting. During the discussion, the PAC was informed that Rs. 189 billion have been deposited by customers as advance payment to 10 car companies.

Breakdown of Rs 189 Billion Advance Payments made to Local Automakers

Indus Motors Company (Toyota) – Rs 99.2 billion
Pak Suzuki Motors Company Ltd – Rs 35.4 billion
Honda Atlas Cars – Rs 21.8 billion
Master Changan Motors – Rs 11 billion
Kia Lucky Motors – Rs 10.6 billion
Hyundai Nishat Motors – Rs 6.9 billion
Al-Haj Automotive (Proton) – Rs 1.7 billion
Ghandara Nissan Limited (GNL/ Chery) – Rs 1.6 billion
Sazgar Engineering Works Limited (Haval/ BAIC) – Rs 0.7 billion
Regal Automobiles (DFSK/ Prince) – Rs 0.3 billion

PAC was also told by an automaker that government had asked the assemblers if they could not deliver the vehicles on time, then why are they taking a huge number of bookings from the customers.

Even before the import restrictions were imposed by the State Bank, the delivery periods of local assembled cars ranged between 3 to up to 14 months depending on the model & assembler. However with such huge amount of money collected in the name of advanced bookings, the assemblers must streamline their operations and ensure they have enough supply to timely deliver the vehicles to the customers. Sparing the Big-3, the annual production of most of the players is below 25,000 units which should be elevated to meet the demand.

UsmanAnsari

A computer animation professional with over 23 years of industry experience having served in leading organizations, TV channels & production facilities in Pakistan. An avid car enthusiast and petrolhead with an affection to deliver quality content to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com