Pak Suzuki halts motorcycle production for second time due to raw material shortage

KARACHI: Pak Suzuki Motor Co. Ltd. (PSMC) said on Friday it has suspended its motorcycle production for 14 days, the second time in a month, due to a lack of essential raw materials.

The company said in a statement to the Pakistan Stock Exchange that its motorcycle plant will remain closed from August 18 to August 31.

The plant had previously been closed from July 31, 2023 to August 15, 2023 due to inventory level constraints. However, the automobile plant will continue to operate as usual.

The company has been facing a continuous shortage of raw materials since the problems began in July of the previous year. This is largely due to challenges importing these essential components, as the country's foreign exchange reserves are declining, leading to import disruptions.

Pak Suzuki is not the only automaker affected by this. Other well-known automakers, such as Honda Atlas and Indus Motor Company, the local producer of Toyota cars, have also recently had multiple shutdowns due to the same shortage of essential raw materials. The scarcity has also had an impact on the auto parts industry, causing periodic production halts.

The effects of these closures go beyond the immediate companies. The disruption of raw material imports caused by prolonged LC opening times has had a negative impact on the entire automotive sector. Unproductive days have consequently become a common problem, resulting in decreased operational capabilities and a general decline in productivity across several economic sectors.

The announcement of Pak Suzuki's latest shutdown has raised concerns among employees, stakeholders, and the general public. The motorcycle plant is a major division within the company and a major employer in the country. As a result, the ripple effect of the closure is expected to impact not only the workforce but also the broader economy.

According to one industry observer, the stoppage of motorcycle production is a sharp reminder of the long-standing problems facing Pakistan's automotive industry. He stressed the need for coordinated efforts between stakeholders and government entities to address the root causes of raw material shortages and prevent further disruptions.

The adoption of sustainable solutions that guarantee the consistent availability of raw materials is essential to the resilience and growth potential of the automotive industry. This calls for concerted efforts to stabilize the industry, stop further closures, and lay the foundation for a healthy automotive ecosystem in Pakistan.