Indus Motor Companyshuts plant for 13 days

KARACHI: A significant participant in Pakistan’s automotive market, Indus Motor Company Limited, has temporarily closed its production facility for 13 days as a result of considerable supply chain disruptions and low demand for vehicles.

Previously, Indus Motors experienced a shutdown of its production plant for two weeks at the end of July and early August due to similar challenges with raw material imports. Indus Motor Company secretary released a statement to the Pakistan Stock Exchange, stating that in the fiscal year 2022-23, due to the challenging economic environment, low consumer purchasing power and increase in duties and taxes by the federal government, the demand for vehicles has continuously declined.

“While considering the low demand and inventory levels, the company has decided to close its production plant from Friday, 25th August 2023 to Wednesday, 6th September 2023 (both days inclusive).”

There are other automakers impacted by the shortage of raw materials besides Indus Motors. Similar problems recently led to multiple shutdown days at other well-known businesses such as Pak Suzuki Motors and Honda Cars.

Due to a lack of foreign exchange reserves in Pakistan, the automobile industry has been struggling, along with other sectors dependent on imported raw materials. The supply chain’s ability to run smoothly has been greatly hampered by the difficulty in opening letters of credit, which has caused delays in manufacturing.

Indus Motor has a major position in the car sector in Pakistan and has made a $100 million investment in the domestic production of hybrid electric vehicles (HEVs).

With over 50 part manufacturers contributing to the value chain by producing parts worth over Rs250 million each working day, the company has played a critical role in developing the local automotive ecosystem.

A total of 53 independently owned authorised dealerships that offer after-sales support to consumers have also been established by the company, creating job opportunities for approximately 450,000 individuals in Pakistan, both directly and indirectly.

The company, its employees, and the entire automotive industry face difficulties as a result of the temporary closure of the production facility. The management of Indus Motor Company Limited is looking for ways to deal with the shortage of raw materials and begin operations as soon as conditions permit.

According to one analyst, finding long-term solutions to guarantee a steady supply of raw materials for the automobile industry and other impacted industries may require cooperation between the government and relevant players.

To lessen the economic impact of these closures and maintain Pakistan’s automotive sector’s growth trajectory, quick action and strategic solutions would be necessary.