Due to economic volatility and import restrictions, Pakistan’s auto industry is in dire straits. As a result, automakers have experienced intermittent shutdowns of their manufacturing facilities.
According to a recent Dawn report, carmakers have laid off between 250,000 and 300,000 workers due to production downsizing. It also stated that component suppliers are among the first casualties of this crisis.
Pak Suzuki Motor Company (PSMC), the largest carmaker in terms of production and sales volume, has halted production for 40 days in the last seven months. Other automakers are also working in single shifts and experiencing production halts.
According to the report, Pakistan experienced a 40% drop in sales in the first seven months of the current fiscal year (7M FY2023). The automakers predict that the situation will worsen in the next five to six months.
CEO of Indus Motor Company (IMC), Ali Asghar Jamali stated that:
It is difficult to forecast future sales scenarios because new LCs for parts and accessories are not yet open. We have no idea what is going on.
Between August 2022 and February 2023, the IMC plant was closed for 53 days. IMC’s sales fell 51% to 21,877 units in 7MFY23. “Given the current situation, I believe overall auto sales will fall by at least 50% in FY23,” Jamali predicted.