Toyota will Stop Total Production
Toyota made a shocking announcement, in which they informed Pakistan Stock that Toyota will stop total production from 20 December to 30 December. The manufacturer of Toyota, IMC- Indus Motors Company announced it.
This is the third time when Toyota will shut down production.
Import of Completely Knocked-Down
The main reason for its actions is bank restrictions on the import of Completely Knocked-Down. This company of Toyota already stopped production in Sep 2022, because of the same reason.
The Bogeyman of Toyota!
By the year 2022, Toyota faced 41 non-production days, and for this, they blamed many times on the central bank.
It’s not the first time, and Toyota is not the only one who is doing so, Suzuki & Honda had also blamed on Central Bank for 20 and 15 non-production days respectively.
Toyota’s, blame is not wrong.
State Bank issued a circular in May 2022. He said the administration would monitor the import of CKD units of cars.
The State Bank’s announcement about CKP imports came just after a day when the government put on the import ban on luxury items to balance foreign exchange.
But cars are not part of ‘luxury’ items they came under scrutiny by the State Bank in a very subtle way.
State Bank asked car companies to trade in dollars for the import of CKD kits. It means now auto traders will have to take permission before trading.
In this way, State Bank will have data on the number of cars and the dollar flows!
Industry to Support Pakistan
State bank is using the automotive industry to support Pakistan’s decaying current account position.
A close View between State Bank’s Policies and worst start.
Several policies of the State Bank became the reason behind Toyota’s poor start to the financial year 2019-20.
Automotive Industries in Pakistan
Automotive industries in Pakistan work on the ‘just-in-time’ model. Toyota started manufacturing after receiving the order for the vehicle. Hence, the process takes time and now the inability to freely access letters of credit required to import CKD kits for manufacturing cars further adds to the time.
Therefore, Toyota is able to take very few orders due to its inability to handle the same level of volume. In the summer Toyota offered refunds due to its inability to deliver the cars.