Indus Motors, a car manufacturing company in Pakistan, has informed the Pakistan Stock Exchange (PSX) that it will temporarily suspend production from June 3 to June 8. The reason behind this decision is the delay in opening Letters of Credit (LC) and shortages of inventory.
Indus Motors has cited challenges faced by their suppliers in importing raw materials and obtaining clearance for their shipments. These difficulties stem from issues with opening Letters of Credit and disruptions in the supply chain. Consequently, the supply chain has been disrupted, preventing the company’s vendors from providing the necessary materials and components required for production. As a result, Indus Motors has decided to completely halt production at its plant during the specified dates. This decision was made following a meeting between Prime Minister Shehbaz Sharif, President Toyota Asia Yoshiki Konishi, and CEO of Indus Motors Ali Asghar Jamali.
It’s important to acknowledge that the auto sector in Pakistan has been grappling with various crises, leading several automakers to announce complete or partial shutdowns in recent months due to different reasons.
The State Bank of Pakistan (SBP) has imposed restrictions on opening Letters of Credit due to the depreciation of the Pakistani rupee. This has caused operational difficulties for industries as the country’s reserves have reached critical levels. This marks the fourth time this year that Indus Motors has announced a production closure, following previous shutdowns from February 1 to February 14, May 2 to May 3, and March 24 to March 27.