Pak Suzuki Extends Plant Shutdown Once Again

Pak Suzuki, the largest auto assembler in Pakistan has once again announced a plant shutdown schedule. This is the 3rd NPD (Non-Production Days) schedule for Pak Suzuki in January 2023 and the 13th since August 2022 taking the total number of NPDs beyond 40.

According to the latest notification the company sent to the Pakistan Stock Exchange (PSX), the company has announced to halt its assembly operations from 16th to 20th January 2023. The decision comes due to restrictions on automotive imports imposed by the State Bank of Pakistan (SBP) as non-approval of the letter of credit (LCs) has created hurdles in importing knockdown kits, causing huge inventory problems for the company.

PS notice 23

However, Suzuki’s motorcycle plant which is less dependent on imported components will remain operational. Although SBP announced the withdrawal of restrictions on imports effective from 2nd January 2023, however despite the removal of the restriction, it isn’t smooth sailing for all importers.

Related: SBP Decides to Withdraw Restrictions on CKD Imports

Authorized dealers are asked to prioritize or facilitate imports under essential imports, energy imports, imports by export-oriented industry, imports for agriculture imports, deferred payment/self-funded imports, and imports for export-oriented projects near completion while needing to keep the customers’ risk profile along with the liquidity position in the FX market before processing.

Furthermore, according to Munir Bana, Chairman of the Pakistan Association of Auto Parts & Accessories Manufacturers (PAAPAM):

“We import raw materials to make spare parts for the auto industry. However, the auto industry is not an essential item and therefore our imports will continue to be controlled and rationed by SBP.”

The SBPs circular still leaves room for opacity, and subsequently leaves many onlookers from the automotive sector in the dark, Munir Bana added. Even if the CKD kits can be imported, if parts manufacturers are unable to subsequently import the requisite components then the downward effect on lead times across the industry will remain limited.

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