Toyota Indus Motor Company announces temporary production suspension

WEB DESK: In a recent development, Indus Motor Company (IMC), the leading assembler of Toyota vehicles in Pakistan, has declared the temporary suspension of production, attributing the decision to inventory shortages.

The company disclosed this information in its notice to the Pakistan Stock Exchange (PSX) on Monday.

According to the official statement released by the automaker, production will cease from October 17 to November 17, 2023, inclusive of both dates.

IMC cited the current inventory levels of manufactured vehicles and parts shortages arising from supply chain challenges as the primary reasons for this hiatus. The company emphasized that any changes to this plan would be duly communicated.

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This marks the ninth instance of production closure by Indus Motor Company in the current year. The company had previously announced a complete shutdown of its plant from September 28 to October 09, citing similar inventory issues.

In the financial realm, Toyota Indus Motor Company reported a profit-after-tax (PAT) of Rs9.66 billion in FY23, reflecting a notable decline of nearly 39 per cent compared to earnings of Rs15.8 billion in the corresponding period of the previous year.

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The auto sector in Pakistan, heavily reliant on imports, has been significantly impacted by the government’s decision to restrict imports and limit the issuance of LCs (Letter of Credits).

Additionally, increased finance costs and a substantial rise in car prices have dampened consumer demand. During the first quarter of FY24, sales plummeted to 20,983 units, marking a sharp 40 per cent decline compared to the same period in the previous year.

The automobile industry in Pakistan is facing demand challenges, primarily driven by high prices, costly auto financing, and a surge in taxes, resulting in a year-on-year decline in sales.