One of Pakistan’s top automakers, Sazgar Engineering Works Ltd, stated on Friday that its four-wheeler car facility would be temporarily shut down for a week due to a lack of raw materials.
Operations at the factory will not resume from February 27 to March 4.
The government’s efforts to limit imports in the face of declining foreign exchange reserves were mentioned by the corporation as a primary factor in the temporary stoppage.
Sazgar Letter to Pakistan Stock Exchange (PSX)
“Due to the government’s stringent measures of minimizing the import of CKD and raw material of vehicles, the company’s supply chain has been disrupted and thereby the company has decided to shut down its car plant (four-wheeler plant) from February 27, 2023, to March 04, 2023,” it said in a statement to the Pakistan Stock Exchange (PSX).
Nonetheless, throughout that time, its factories for making three-wheelers and automotive parts will continue to be in use.
When Sazgar Engineering introduced Pakistan’s first hybrid vehicle, “Haval,” in November 2022 using a Chinese CKD and sub-assembly plant, it was regarded as a key turning point for the business and the country’s automotive sector.
Sazgar is not alone in the current predicament; a number of other significant automakers, such as Indus Motors and Pak Suzuki Motors, are also having difficulties as a result of the lack of raw material imports. They are now working shorter workdays as a result.
The crisis that the auto manufacturing sector is currently experiencing has been attributed primarily to the fall in Pakistan’s foreign exchange reserves.
The restrictions on the importation of raw materials have made the problem worse and contributed to a lack of components and materials needed for the manufacture of automobiles.
Due to the sector’s importance to the national economy, the situation is troubling for both the government and the automotive industry.
Although the government has adopted severe measures in the mini budget to appease the International Monetary Fund (IMF) and start the IMF program, it is nevertheless making every effort to enhance foreign exchange reserves.
The staff-level agreement, however, still appears to be behind schedule, which prevented the foreign exchange reserves from significantly increasing.
The industry is expecting for a speedy resolution to the problems being faced as a result of the difficulties in importing raw materials.
One example of the difficulties the Pakistani auto manufacturing sector is currently facing is the temporary shutdown of the Sazgar four-wheeler automobile plant.
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