Saturday, December 2, 2023

Toyota Shuts down Production in Pakistan

Indus Motor Company (IMC), responsible for Toyota vehicle assembly in Pakistan, has announced another production halt due to inventory shortages. This decision comes amidst ongoing challenges in the supply chain leading to a scarcity of essential parts. The production pause is scheduled from October 17 to November 17, as indicated in the notice to the Pakistan Stock Exchange (PSX). This marks the ninth instance of production closure by Indus Motor in the current year, reflecting the severity of the supply chain issues and inventory challenges.

The automotive sector in Pakistan heavily relies on imports, and recent government measures to curtail imports and restrict letter of credits (LCs) issuance have added strain. Additionally, heightened finance costs and a notable increase in car prices have dampened consumer demand, further exacerbating the challenges faced by manufacturers like Indus Motor.

Financially, Indus Motor’s latest statements show a decline in profit-after-tax (PAT) for FY23, totaling Rs9.66 billion. This marks a substantial decrease of almost 39% compared to the previous year’s earnings of Rs15.8 billion. The combination of production disruptions, inventory problems, government policies, and economic factors has created a difficult environment for the auto industry in Pakistan, necessitating strategic planning and adaptations to weather these obstacles and ensure a sustainable future for the sector.

Related Articles

Latest Articles