Amid non-issuance of LCs, PSMC Observes two Non-production days

Since the government has continued its ban on imported items, auto manufacturers are left with the dilemma of not getting essential car parts for assembling. This has greatly affected the auto industry which is unable to meet the demand amid such a problem.

Last month, Toyota Indus announced non-production days. Honda Atlas was also rumored to observe non-production days but the company later clarified that no such directive was issued. Now, PSMC has also announced to shut down production on the 18th and 19th of August.

This is devastating news as Pak Suzuki assembles some of the hottest selling cars in the country, and some of those are mostly bought by the middle class who have no other option. Even before the import ban, Pak Suzuki’s Alto and Wagon R took too long to deliver to the customer.

This news means that the buyers will have to wait for even more to get their cars.

Moreover, this news is devastating for the industry as well, as non-production days are a huge loss for the companies as well. A company can only handle a couple of days of production shutdown. Furthermore, it will have to lay off workers, which is even worse news in such economic times.

With the IMF’s $1.2 billion expected by the end of this month, and other $3-4 billion expected from other friendly countries, it is likely that the import ban will be lifted and things will get back to normal very soon.

Lastly, auto manufacturers need to step up localization of their cars to ensure low production costs as well as low import bills for the country. This will not only prevent the country from huge trade deficits but also prevent these companies from future import bans.

What are your thoughts about PSMC’s decision to observe non-production days? What do you think of the state of affairs in the automotive sector in the months to come?