Toyota, Suzuki to partially shut output over forex, shortage

KARACHI: Pakistan’s two leading car assemblers, Toyota and Suzuki, plan partial plant shutdowns next month owing to unavailability of raw material amid import restrictions and exchange rate volatility.

The government in recent weeks has attempted to curb imports in the face of fast depleting foreign reserves, a declining currency and a widening current account deficit, BBC Urdu reported.

The move has had a cascading effect on industries that rely on imports to complete finished goods as they say the central bank has delayed the clearance of letters of credit with banks facing a shortage of dollars, affecting their ability to import materials.

An official of Indus Motors said the company was offering refunds to customers facing delays and markups on their payments, with deliveries likely to be delayed by at least three months and prices to be revised as the country does not have dollars available.

Pak Suzuki, which assembles Suzuki vehicles locally, echoed the sentiment, citing the central bank’s new mechanism for prior approval for imports. “Restrictions had adversely impacted clearance of import consignments from ports,” the head of public relations for Pak Suzuki Motors said. He said the unavailability of materials may result in a plant shutdown in August.