ISLAMABAD, JULY 18: We haven’t heard anything new about any local automakers’ production halts or reductions in months. This was made possible by no restrictions on Letters of Credit and no supply chain disruption.
But according to a recent update, Toyota Indus Motor Company (IMC) has put a one-week hold on the car’s manufacture. The company disclosed the update to Pakistan Stock Exchange (PSX) in a correspondence.
The company has chosen to close its production plant from July 15, 2024, to July 22, 2024 (both days inclusive), citing low inventory of built vehicles and supply chain issues resulting in a scarcity of parts and components for vehicle construction.
With its economic charts destroyed, hyperinflation rampant, and customers’ purchasing power halted, Pakistan is at a critical crossroads. For example, the total sales of the BIG 3, which consists of Toyota Indus Motor (IMC), Honda Atlas, and Pakistan Suzuki Motor Company (PSMC), fell to a 21-year low in the fiscal year 2023–24, selling 88,000 units, according to a JS Research research.
Low Volume of Sales
On the other hand, the research went on to say that these Japanese automakers sold 113,346 cars in total during the fiscal year 2022–2023. Along with declining sales and output, a rise in the number of imported pre-owned vehicles has also significantly impacted local assemblers. For this reason, a week ago, PAMA and PAPAAM wrote the Prime Minister a letter in which they requested a rise in the withholding tax on secondhand import autos under 1300cc.
Concerns were voiced by the groups when they presented data from January to May 2024, which showed that over 62% of used import cars had engines less than 1300cc. PAMA did, however, also suggest that cars with engines smaller than 1300cc be subject to a 15% regulatory duty (RD), with the current rate of newly imposed RD on engines larger than 1300cc being maintained.
Moreover, one of the proposals was to keep using SRO 577 (I) 2005, which was last revised in 2015 and causes the government to lose a significant amount of revenue. What are your thoughts regarding the latest IMC-announced production shutdown? Please let us know in the comments.
