In a notice to the Pakistan Stock Exchange (PSX) on Friday, Indus Motor Company (IMC), the company responsible for assembling Toyota vehicles in Pakistan, has once again disclosed to halt production due to shortages of raw materials and components.
The automaker informed that import challenges, including difficulties in opening Letters of Credit (LCs) and supply issues from certain foreign vendors, continue to disrupt the supply chain.
As a result, IMC and its vendors are unable to provide an adequate supply of raw materials and components to sustain production.
This marks the fifth time this year that Indus Motor has announced production closures. Previously, the company suspended its plant operations from June 3 to June 8, May 2 to May 3, February 1 to February 14, and again from March 24 to March 27, all due to inventory shortages.
Consequently, the company has insufficient inventory levels to continue its production activities and has therefore chosen to completely shut down its production plant from June 26 to June 27.
The auto sector in Pakistan, which heavily relies on imports, has faced significant challenges due to the government’s restrictions on imports and LC issuances. Additionally, increased finance costs and substantial price hikes in cars have contributed to a decrease in consumer demand.
In the third quarter of the financial year 2022-23, IMC reported a profit-after-tax (PAT) of Rs3.216 billion, reflecting a 37% decrease compared to earnings of Rs5.118 billion in the same period of the previous year. However, on a quarterly basis, the PAT of Indus Motor showed a substantial increase of 142%.
