Indus Motor Company (IMC), responsible for Toyota vehicle assembly in Pakistan, has once again halted production due to shortages in inventory. This decision is a result of ongoing supply chain challenges and a scarcity of essential parts. The production pause, as reported to the Pakistan Stock Exchange (PSX), is scheduled from October 17 to November 17. This is the ninth time that Indus Motor has had to suspend production in the current year, underscoring the severity of the supply chain and inventory issues.
The automotive sector in Pakistan heavily depends on imports, and recent government measures to limit imports and restrict the issuance of letter of credits (LCs) have added to the strain. In addition, increased finance costs and a significant rise in car prices have reduced consumer demand, further exacerbating the challenges faced by manufacturers like Indus Motor.
Financially, Indus Motor’s most recent financial statements show a decline in profit-after-tax (PAT) for FY23, amounting to Rs9.66 billion. This represents a substantial decrease of nearly 39% compared to the previous year’s earnings of Rs15.8 billion. The combination of production disruptions, inventory problems, government policies, and economic factors has created a challenging environment for the auto industry in Pakistan. This situation calls for strategic planning and adaptations to navigate these obstacles and secure a sustainable future for the sector.