Tag: local auto industry

  • Chery Pakistan increases Tiggo 4 Price to Rs7 million

    In the face of mounting economic uncertainty, import restrictions, and complications surrounding Letter of Credit (LC) transactions, Chery Pakistan has been forced to implement a significant price hike on one of its popular crossover SUVs.

    According to Pakwheels, the Chery Tiggo 4, a favoured choice among Pakistani car enthusiasts, will now come with a heftier price tag, soaring from Rs6,399,000 to Rs6,999,000, reflecting an increase of Rs600,000. This move comes as Chery Pakistan grapples with the multifaceted challenges posed by a volatile economic landscape and supply chain disruptions, as the company revealed in an official statement.

    The surge in pricing has been attributed to the prevailing precarious economic conditions and the stifling supply constraints that have been a constant thorn in the side of numerous industries, including the automotive sector. Nevertheless, Chery Pakistan aims to mitigate the impact on its customers by extending a price lock guarantee to all new bookings for the Chery Tiggo 4, providing a semblance of stability amidst the tumultuous market fluctuations.

    The price escalation, while not entirely unexpected, underscores the current tribulations faced by Pakistan’s local auto industry. As a sector heavily reliant on imported components, particularly critical vehicle parts, the domestic car manufacturing industry is inherently susceptible to the ripple effects of foreign exchange rate fluctuations.

    Compounding the challenges are the import restrictions introduced by governmental authorities, leading to a cascade of delays and, in some instances, complete production standstills for various car manufacturers.

    The predicament has been further exacerbated by the non-issuance of LCs by the State Bank of Pakistan (SBP), casting a darker shadow over an already beleaguered landscape. Industry experts predict that the situation is poised to persist for the foreseeable future, with a grim timeline of at least 2–3 years for the auto sector to regain its footing.

    The intertwining of persistent economic woes with a backdrop of political instability paints a disheartening picture, further clouding the prospects of a swift recovery.

  • Toyota IMC announces shutdown of production plant once again due to parts shortage

    Toyota IMC announces shutdown of production plant once again due to parts shortage

    Indus Motor Company Limited (INDU), the company known for assembling and selling Toyota-brand vehicles in Pakistan, has announced the temporary shutdown of its production plant from March 24 to March 27 due to raw material and component shortages.

    In a notice to the Pakistan Stock Exchange (PSX), Indus Motor cited difficulties in opening Letters of Credit (LCs) for raw materials by banks, which have caused a disruption in the supply chain of the company and its vendors.

    As a result, the company is unable to continue its production activities due to insufficient inventory levels. This is the second time this year that Indus Motor has announced the shutdown of its plant, with the first being from February 1 to February 14 due to an inventory shortage.

    The CEO of Indus Motor, Ali Asghar Jamali, had previously acknowledged the challenges facing the local auto industry, including the restrictions on Completely Knocked Down (CKD) kits, which have resulted in manufacturers operating at only 40-45 per cent of their capacity.

    The auto industry in Pakistan is heavily reliant on imports and has been affected by the State Bank of Pakistan’s (SBP) restrictions on the opening of LCs, following a sharp depreciation of the rupee.

    The SBP has imposed restrictions on imports due to the country’s low foreign exchange reserves, which has resulted in operational hindrances for many industries, including the auto sector.

    Although the SBP withdrew import restrictions in January, many industries are still struggling due to the dollar shortage.