Suzuki Halts Production For Five Days Due To An Inventory Shortage

Pakistan’s arm of a Japanese automobile manufacturer has closed its plant due to a severe shortage of inventory

Pakistan’s Pak Suzuki Motors has announced the shutdown of its automobile plant for almost a week due to a shortage of inventory. The reason for this is that commercial banks have refused to open letters of credit for importers due to the lack of foreign currency.

There has been a severe impact on the country’s import-based businesses due to the dollar shortage, as the government struggles to convince the International Monetary Fund to reinstate a suspended loan program. As a result of the IMF’s extended funding facility, Pakistan’s foreign exchange reserves would be boosted, which are currently at a level of three weeks’ worth of imports, which is considered to be concerning.

According to a statement to the Pakistan Stock Exchange, the company will shut down its automobile plant between February 13th and February 17th because of a continued shortage of inventory. However, the motorcycle plant will continue to operate. This is the fourth time this year that the company has had to halt its production activities, having previously done so in early January.

As a result of the depreciation of the rupee against the dollar, the company increased the prices of its various car models by up to Rs. 355,000 last month. Passenger car sales dropped 44% in December, falling to 13,768 units compared to 24,471 units in December 2021, according to data from the Pakistan Automotive Manufacturers Association.


It’s worth mentioning that PSMC is involved in the assembly, progressive manufacturing, and marketing of Suzuki cars, pickups, vans, 4x4s, motorcycles, and related spare parts. Recently, the manufacturer of Toyota vehicles, Indus Motor Company, announced a complete shutdown of its production plant from February 1st to 14th, citing “insufficient inventory levels”.

The IMC management explained to the PSX that commercial banks have been advised to prioritize imports for specific sectors only, not the automobile industry. The company and its vendors continue to face major difficulties in importing raw materials and getting clearance for their consignments from commercial banks. In addition, the company has decided to operate on a “single shift” basis from February 15th until further notice.

Written by Aly Bukshi

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