KARACHI: Indus Motor Company Limited, a prominent player in Pakistan’s automotive industry and the manufacturer of Toyota vehicles has temporarily closed its production plant for two weeks.
The closure is due to challenges in importing raw materials, causing disruptions in the supply chain. Last month, the company faced a brief shutdown for similar reasons.
However, the current situation has worsened, leading to insufficient inventory levels for sustaining production.
Indus Motor’s company secretary released a statement to the Pakistan Stock Exchange, outlining difficulties in importing raw materials and clearing consignments. It is primarily due to issues with opening letters of credit (LCs) and supply problems from foreign vendors.
As a result, the company has no choice but to halt production temporarily for two weeks from July 21, 2023, to August 3, 2023.
The raw material scarcity issue has also affected other automotive manufacturers like Pak Suzuki Motors and Honda Cars.
The automotive sector and other industries dependent on imported raw materials are facing these challenges. It is mainly due to a shortage of foreign exchange reserves in Pakistan.
Indus Motors which manufactures Toyota vehicles in Pakistan has a significant presence in the country’s automobile industry. It invested $100 million in local production of hybrid electric vehicles (HEVs).
The company plays a crucial role in establishing the local automotive ecosystem. It has over 50 part manufacturers and produces parts worth over Rs250 million every working day.
Indus Motors has also established 53 independently owned authorized dealerships. It generates employment opportunities for over 450,000 people directly and indirectly across Pakistan.
The temporary production plant closure poses challenges for the company, its employees, and the overall automobile industry.
Indus Motor’s management is likely exploring solutions to address raw material scarcity and resume operations as soon as possible.
