Indus Motor shuts down plant in Pakistan amid ‘supply chain disruption’

ISLAMABAD: Indus Motors Company (IMC), the maker of Toyota vehicles, has decided to shut down its production plant in Pakistan again, citing a disruption in company’s supply chain, ARY News reported on Friday.

In a letter addressed to the general manager of the Pakistan Stock Exchange (PSX), he IMC management said that its production will be shut down from June 3 to June 8 due “delay in opening of Letters of Credit (LC) and inventory shortages”.

Indus Motors said that its vendors continue to face hurdles in import of raw materials and receiving clearance of their consignments, on account of challenges in opening of LCs and supply chain issues.

“This has disrupted the supply chain and the vendors are unable to supply raw materials and components to the company. It has insufficient inventory levels to maintain production, therefore the company is unable to continue its production activities,” the letter said.

It added, “In view of the above, the company has decided to completely shut down its production plant from 3 June 2023 to 8 June 2023.”

The development came a day after a meeting between Prime Minister (PM) Shehbaz Sharif and President Toyota Asia Yoshiki Konishi and Chief Executive Officer of Indus Motors Ali Asghar Jamali.

It is pertinent to mention here that Pakistan’s auto sector remains engulfed in various crises, with a number of automakers announcing complete or partial shutdowns in recent months citing various reasons.

The State Bank of Pakistan (SBP) imposed restrictions on the opening of Letters of Credit (LCs) after unabated rupee depreciation. Industries were facing hindrances in operations as the country’s reserves depleted to a critical level.

This is Indus Motor’s fourth announcement of production closure this year. Earlier, the company shutdown its plant from February 1 to February 14, May 2 to May 3 and March 24 to March 27.