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Toyota's Declares Another Plant Shutdown

21 Jul 2023   464   Toyota
Toyota

Toyota's Declares Another Plant Shutdown

Indus Motor Company Limited, a major player in Pakistan's automotive industry, has recently made a significant announcement. The company will temporarily close its production plant for two weeks, starting from July 21, 2023, until August 3, 2023. This decision comes in response to the ongoing challenges faced by the company in importing raw materials, leading to severe disruptions in its supply chain.

Supply Chain Woes and Inventory Shortages

Indus Motors had encountered a brief shutdown of its production plant just last month due to similar issues with raw material imports. Unfortunately, the situation has deteriorated further, resulting in insufficient inventory levels, making it impossible to sustain regular production activities.

The Struggle with Raw Material Imports

The company's secretary has issued a statement, shedding light on the hardships faced not only by Indus Motors but also its vendors in importing raw materials and clearing consignments. The primary factors behind these challenges include difficulties with opening letters of credit (LCs) and supply problems from foreign vendors, forcing the company to temporarily halt production.

Industry-Wide Impact

Indus Motors is not alone in grappling with raw material scarcity. Other major automotive manufacturers, such as Pak Suzuki Motors and Honda Cars, have also experienced shutdown days in recent months due to similar issues. The entire automotive sector, along with other industries relying on imported raw materials, has been profoundly affected by the shortage of foreign exchange reserves in Pakistan.

Indus Motors' Contribution to the Local Automotive Ecosystem

As a prominent player in Pakistan's automobile industry, Indus Motors has made substantial investments in local production of hybrid electric vehicles (HEVs). The company has played a crucial role in establishing the local automotive ecosystem, with more than 50 part manufacturers contributing to the value chain by producing parts worth over Rs. 250 million every working day.

Job Creation and After-Sales Service

Furthermore, Indus Motors has established 53 independently owned authorized dealerships that provide aftersales service to customers, generating employment opportunities for over 450,000 people directly and indirectly across Pakistan.

A Deeper Impact on the Supply Chain

The struggle to open letters of credit (LCs) and supply problems from foreign vendors have severely impacted the smooth functioning of the supply chain in Pakistan's auto industry. The shortage of foreign exchange reserves in the country has exacerbated the situation, affecting various industries reliant on imported raw materials.



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