The problems for the auto industry continue as Indus Motor Company (IMC) has announced another plant shutdown. The combination of LC issues and low demand has forced the company to report another plant closure for two weeks.

Notification by IMC

In a notification to the Pakistan Stock Exchange (PSX), the company stated per Sections 96 and 131 of the Securities Act 2015 and Clause 5.6.1 (a) of PSX Regulations, IMC hereby conveys the following information:

• In the fiscal year 2022-23, the demand for the auto sector has continuously declined due to the challenging economic environment, low consumer purchasing power, and increased duties and taxes by the Federal Government.
• While considering the low demand and inventory levels, the company has decided to close its production plant from Friday, August 25, 2023, to Wednesday, September 6, 2023 (both days inclusive). 

You may please inform the TRE Certificate holders of the Exchange accordingly. Commenting on the situation, economist Abdul Rehman tweeted that this industry should seriously work on developing some sort of expert business for long-term sustainable operations.

Problems for auto assemblers continue‼️

Combination of LC issues (even today) and low demand means another 2 week closure for Toyota.

This industry should seriously work on developing some sort of export business for long term sustainable operations. pic.twitter.com/td56I5w67K

— Abdul Rehman (@AbdulRehman0292) August 24, 2023

Previous Toyota Plant Shutdowns  

Earlier, the company announced a closure of its production plant for two weeks, from July 21, 2023, to August 3, 2023. The decision to another plant shutdown came as the IMC grapples with significant challenges in importing raw materials, leading to disruptions in its supply chain.

Other Shutdowns

Indus Motors is not alone in facing the brunt of raw material scarcity. Other major automotive manufacturers, including Pak Suzuki Motors and Honda Cars, have also experienced shutdown days in recent months due to similar issues. The automotive sector, along with other industries reliant on imported raw materials, has been grappling with these challenges due to a shortage of foreign exchange reserves in Pakistan.

As a significant player in Pakistan’s automobile industry, Indus Motors has invested $100 million in local production of hybrid electric vehicles (HEVs). The company has played a crucial role in establishing the local automotive ecosystem, with over 50 part manufacturers contributing to the value chain by producing parts worth over Rs. 250 million every working day.