Suzuki has notified the Pakistan Stock Exchange that it will halt all production from January 2 to January 6. This will be the sixth time that Suzuki will observe non-production days this fiscal year. However, this will be the first time that Suzuki will halt production for both its automotive and motorcycle plants.
Suzuki has cited insufficient inventory levels due to the State Bank’s restrictions on imports of completely knocked-down (CKD) kits as the main reason for its actions. The company had previously halted production from August 18 to August 19, August 22 to August 26, August 29 to August 31, October 19 to October 21, and October 24 to October 26.
“Suzuki will have cumulatively observed twenty-one non-production days for its automotive plant and five days for its motorcycle plant. It is a very critical time for Pak Suzuki due to import restrictions and also no future information till how much more time these restrictions will continue. Detention, demurrages, and KIBOR+3% are really hurting our industry,” says Shafiq Ahmed Shaikh, Head of Public Relations and Official Spokesperson at Pak Suzuki Motor Company Limited.
“Our dealerships and vendors are also very disturbed due to no sales and production respectively. Request to the Government of Pakistan to please have discussion with Industry to solve the matter on an urgent basis,” Shaikh continued.
Suzuki’s announcement comes exactly a week after Toyota Indus Motor had made public that they will be halting their production for the remainder of the year on account of the same reason. Similarly, Honda has also observed 15 non-production days this fiscal year due to the State Bank’s import restrictions.
Their blame, however, is not misplaced. In May, the State Bank issued a circular stating that it now possessed administrative oversight over the import of CKD units of cars being imported into the country.
Essentially, the State Bank told car companies in Pakistan that they needed to seek permission before performing transactions in dollars for the import of CKD kits. This meant that auto assemblers in the country will now need express permission from the State Bank to assemble them in the country.
(www. pakistantoday.com.pk.)
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