Rupee depreciation hits Pak auto industry hard

KARACHI: Rupee depreciation has landed the country’s auto industry into a crisis with automobile manufacturers reducing production by 30 to 60 per cent.

According to the industry’s sources, the condition of advance permission for dollar payment for imports imposed by the State Bank of Pakistan (SBP) and dollar flight have adversely affected the auto parts import, causing a significant cut in production.

Toyota vehicles maker Indus Motors’ production has come down by 60 per cent, while another manufacturing group is working in a single shift and has abolished its double shift. Suzuki has hinted at closing down its plant.

Indus Motors Chief Executive Asghar Jamali said that as the SBP is allowing only 35 to 40 per cent auto parts import, the company had proportionately reduced its production.

Since the company cannot meet the demands of those who have booked vehicles and keeping in view the national interest, it has advised its customers that either they wait for three to four months or withdraw their payments with interest, Asghar Jamali added.

Another company’s official said vehicles’ prices were increased two months ago, but dollars had risen by Rs40 since then. Therefore, he said, the prices would have to be increased. In this uncertain environment, production cannot be continued, he said, adding the manufacturers would soon have to increase prices.