The news that Toyota Pakistan along with Suzuki and Honda are thinking to close their respective assembly lines has been dominating the social media. In this regard, Toyota has made an official announcement.
The company would like to clarify that as of today, there are no plans fixed for a complete plant shutdown for more than two weeks in the month of August 2022. The production schedule of the company and any non production days (NPDs) remain contingent on a number of external and variable factors. The company is actively monitoring its production and operations, and is closely working with the government and SBP to alleviate the present challenges.
Toyota Indus Motors sent the said notification letter to Pakistan Stock Exchange elaborating on the matter, and shedding light on any doubts about permanent plant closure.
Carmakers to cut production until economic picture clears!
Ali Asghar Jamali, CEO Toyota Pakistan said about the issue,
We will give customers the option to avail a refund with the full interest. In case they choose not to opt for this (refund), they will have to wait at least 3 (more) months from the delivery month given on the Provisional Booking Order Form and (also) pay the price differential due to the exchange rate situation.
Similarly, Suzuki has also addressed the plant closure news and their Head of Public Relations, Mr Shafiq Ahmed Shaikh said,
Currently the commercial banks are not opening letters of credit for completely knocked down (CKD) kits. Unavailability of CKD kits and related raw materials may result in plant shutdown next month.
But unlike Toyota, Suzuki has voiced its fears of permanent plant closure in case the economic situation worsens. Pak Rupee is rapidly declining in international markets compared to the US Dollars. And the State Bank of Pakistan has refused to issue letters of credit to all these companies who rely on imported parts to assemble vehicles in Pakistan.
All automakers in Pakistan are basically assemblers. Most of the raw material is imported/bought from other countries, and since these transactions are done in USD, we are bleeding foreign reserves. Until the dollar is controlled, and the market stables, closure of big companies cannot be disregarded.