Indus Motor Company (IMC), the assembler of Toyota vehicles in Pakistan, has once again announced that it will shut production, citing inventory shortages.
This time production will be suspended from October 17 to November 17, the automaker shared the development in its notice to the Pakistan Stock Exchange (PSX) on Monday.
“Based on current level of inventory of manufactured vehicles and parts shortages due to supply chain challenges, the company has decided to close its production plant from 17 October 2023 to 17 November 2023 (both days inclusive),” the company said in the PSX statement.
“In case of any change in plan will be updated accordingly,” added the company.
This is Indus Motor’s ninth announcement of production closure this year. Earlier, the company announced a complete shutdown of its plant last month from September 28 to October 09 citing inventory issues.
As per Indus Motor’s latest financial statements, the company posted a profit-after-tax (PAT) of Rs9.66 billion in FY23, a decrease of nearly 39% as compared with earnings of Rs15.8 billion in the same period of the previous year.
The country’s auto sector, hugely dependent on imports, has been hit hard by the government’s decision to curb imports and restrict issuance of LCs. Additionally, higher finance cost and massive increase in car prices have also reduced demand from consumers.
In the first quarter of FY24, the sales stood at 20,983 units, down 40% as compared to the same period the previous year.
“The automobile industry in Pakistan is facing demand challenges, primarily driven by high prices, costly auto financing, and a surge in taxes, resulting in a YoY decline in sales,” Deputy Head of Research at JS Research Waqas Ghani told Business Recorder.
“Escalating car prices, expensive auto financing, and the low purchasing power of consumers are among the primary reasons for the decline in YoY sales,” Sunny Kumar, deputy head of research, wrote in his report for Topline Securities.