Pak Suzuki halts production for first time in 2024 due to CKD kit shortage

KARACHI: Pak Suzuki Motor Company (PSMC) has announced the indefinite suspension of operations at its Karachi manufacturing facility, citing a significant delay in the approval process for Completely-Knocked Down (CKD) kits.

According to Express Tribune, these kits have been held at the port for the past 45 days, marking the first closure of the plant this year.

Pak Suzuki is renowned for its popular models, including the Suzuki Alto, which enjoys high sales due to its competitive pricing compared to other vehicles in the market.

The production halt has placed considerable financial pressure on the company. PSMC is grappling with substantial detention and demurrage fees, while the government faces a loss in taxes and duties from reduced production and sales, according to Shafiq Ahmed Shaikh, PSMC’s Head of Corporate Affairs.

Industry groups, such as the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), have called on the government to adhere to the 2021-2026 auto policy.

They caution that ongoing delays and service interruptions could dissuade potential new investors and exacerbate challenges for existing foreign investors in the automotive sector.

The broader automotive industry is already experiencing severe difficulties, with many local parts manufacturers forced to lay off thousands of workers due to decreased production. High taxes, elevated interest rates, and steep energy tariffs have compelled many industrialists to cut back on factory shifts and reduce their workforce over the past two and a half years.

Auto expert Mashood Khan supports the call for urgent government action, stating, “The government must address these issues decisively. It is crucial to consult with industrialists to resolve these problems swiftly. Any irregularities should be corrected within 24 hours to prioritise the industry’s survival.”

Khan further emphasises that the shutdown impacts approximately 140-145 vendors, potentially jeopardising their ability to pay employees. Both workers and factory owners are burdened by high taxes and exorbitant energy costs.

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