Pak Suzuki closes their plant in Pakistan over CKD kit delay

The broader auto industry has faced severe challenges over the past two and a half years

Web Desk

09 Aug, 2024

Business & Economy

Pak Suzuki Motor Company Limited (PSMCL) has been forced to halt production at its Karachi plant due to a delay in the approval of Completely-Knocked Down (CKD) kits, which have been stranded at the port for the past 45 days. This is the first closure of the plant this year.

The shutdown has created significant financial strain for the company. PSMCL is struggling to cover billions of rupees in detention and demurrage fees, while the government is losing out on taxes and duties due to the lack of production and sales, as per Shafiq Ahmed Shaikh, PSMCL’s Corporate Affairs Head.

Industry associations, including the Pakistan Automotive Manufacturers Association (PAMA) and the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), have urged the government to adhere to the auto policy for 2021-2026.

They warned that continued delays and service disruptions will deter new investors and worsen the situation for existing foreign investors in the auto sector.

The broader auto industry has faced severe challenges over the past two and a half years, forcing many local parts manufacturers to lay off thousands of workers due to reduced production at their plants. High taxes, interest rates, and steep energy tariffs have led numerous industrialists to cut back on factory shifts and reduce staff.

Auto industry expert Mashood Khan supported on the companies’ position, stating that the government needs to take decisive action to address these issues.

Khan suggest that the government should consult with industrialists to swiftly resolve the problems, and correct any irregularities within 24 hours, as prioritizing the industry is crucial for the country’s overall interests.

“The cost of doing business is a complex issue that the government must address to ensure the industry’s survival,” Khan said.

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