Automakers are slashing production and hiking prices in Pakistan owing to a demand slump, shortage of crucial raw materials and unfavorable economic conditions.
Indus Motor Company (IMC) on Tuesday announced a production suspension from Feb. 1 through Feb. 14. The company in a stock filing said it would resume production from Feb 15 on a single shift basis until further notice.
This is the fourth time since June that the assembler of Toyota vehicles has halted production, citing import restrictions imposed by the State Bank of Pakistan (SBP) and exchange rate volatility. Previously the company had shut down its production plant from Aug 1-13, Sept 1-16 and Dec 20-30, 2022.
IMC said the central bank on Jan. 2 advised commercial banks to prioritize/facilitate imports of some specific sectors only, and that list does not include the auto sector. This led to disruption in the entire auto industry supply chain and the auto vendors are unable to supply crucial raw materials and components to the auto manufacturers, including IMC.
Auto vendor Agriauto Industries Ltd (AIL) has also announced a partial closure of its production plant due to a sharp decline in demand for parts and accessories from major automakers.
Pak Suzuki Motors Company had also closed its production plants from Jan. 2 to Jan. 6 citing a shortage of inventory level.
Car prices hike in Pakistan
Despite production stoppages and a 52% drop in sales during the first half of 2023, IMC shocked its customers by raising prices from Rs. 280,000 to Rs. 1.2 million on various models in the second week of January.
Kia Motors jacks up prices: Kia Lucky Motor Corporation has raised the price by Rs. 100,000 to Rs. 1.3 million effective Feb 1. Till last month, the company has been offering a price lock option to the customers with immediate delivery.
Suzuki Motor hikes prices: Pak Suzuki Motor Company (PSMC) last week announced the first price hike of 2023 for its popular vehicles, increasing the prices of various models by Rs. 100,000 to Rs. 355,000.
Hyundai raises car prices: Hyundai Nishat also hiked its car prices. New and increased Hyundai car prices will be effective from Feb. 1.
Peugeot Pakistan suspends car booking: Due to Pakistan’s dwindling economy and the constant depreciation of the rupee against the dollar, local car assembler Peugeot Pakistan closed the booking of its cars till further notice.