Pak Suzuki Motor Company (PSMU) has announced that it will temporarily shut down its motorcycle plant for 12 days due to a shortage of inventory. On Friday, March 17, the Pakistan Stock Exchange (PSX) was notified of this decision.
The plant will be closed from March 20 to March 31, but the automobile plant will remain operational during this period.
The business has been dealing with an inventory shortage for some time. It is the local assembler, manufacturer, and marketer of Suzuki cars, pickups, vans, 4x4s, and motorcycles. In fact, PSMC had to temporarily shut down its auto plant twice last month as a result of the same problem.
One of the causes of the inventory shortage, according to the company’s notice, is the State Bank of Pakistan’s (SBP) system for prior approval for imports. The clearance of import shipments has reportedly been negatively impacted by the SBP’s restrictions on opening letters of credit (LCs), which has led to lower inventory levels, according to PSMC.
The decision by PSMC was made as Pakistan’s auto industry, which is heavily reliant on imports, is in crisis. Due to the low reserves in the nation, the industry has been experiencing operational challenges.
The longest plant shutdown among Japan’s automakers during the current economic crisis was announced last week by Honda Atlas Cars Pakistan Limited, a division of the country’s largest automaker, Honda Motor Co Ltd. The plant of the company will be shut down from March 9 to March 31, 2023.
The decision of PSMC, a significant player in Pakistan’s automotive market, to temporarily close its motorcycle plant is anticipated to have a profound effect on the industry. The business, which controls about 54% of the market, is the largest motorcycle manufacturer in the nation.
Pakistan’s struggling auto industry has taken another hit with PSMC’s decision to close its motorcycle plant. Due to the SBP’s restrictions on LCs, there is a shortage of inventory, which has resulted in a series of plant closures and decreased production throughout the industry. To address the problem and stop further harm to the industry, the government must act right away.