The import of auto parts dropped by 36.6 percent to $258 million in the July-September quarter from $407 million during the same period previous year as a direct result of limitations put in place by the State Bank of Pakistan to reduce the demand for autos.
To assist clear imported consignments of auto components, the central bank has been providing foreign currency at a rate of 50 to 70 percent since July, but imports have not yet picked up.
Pak Suzuki Motor Company Ltd (PSMCL) managed to keep its production plant shut for 28 days from August to October due to supply chain disruption and low inventory levels of parts. This included a five-day closure for period maintenance, followed by a 29-day plant shutdown by Indus Motor Company (IMC) from August to September, and a 12-day closure by Honda Atlas Cars Ltd (HACL) in October.
From July to September, vehicle finance decreased by Rs17 billion to Rs397.4 billion. The manufacturer of Toyota automobiles informed the brokerage house analysts in a corporate briefing of 1QFY23 that owing to SBP constraints, the firm is now operating at a production capacity of 4050% and that the IMC management does not anticipate the limits loosening very soon.
The management explained to the analysts that the exceptional depreciation of the rupee and import restrictions had put the vehicle industry in the face of unexpected external problems. Additionally, the devastation caused by recent floods, increased inflation, and customers with poor purchasing power may reduce demand for the whole car sector in the coming months.
According to IMC, vehicle financing has decreased from 35 percent to merely 10 percent as a result of increased interest rates and a shorter loan term.
Regarding the previously stated refund policy, the IMC management said that 400500 customers had cancelled their reservations and received their money back plus interest.
A $100 million investment plan is on track, and the corporation anticipates launching its variation by the end of the next year in 2023.