Economic challenges hitting Pakistan’s auto industry, industry CEO calls for government support
Economic challenges hitting Pakistan's auto industry
23:00
February 3, 2023
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February 03, 2023 (MLN): The local automobile industry in Pakistan is facing multiple challenges due to the current economic conditions, making it difficult for manufacturers to remain profitable.
The core issue is the continued import restrictions on CKD (completely knocked down) kits, causing reduced capacity and potential plant closures.
The depreciation of the Rupee, rising inflation, and tighter fiscal and monetary measures are having a negative effect on the industry, coupled with decreased consumer demand.
The weakened PKR will increase production costs and further restrict the manufacturers' bottom line.
The replacement of the quota system for auto imports with a priority list for banks is leaving little room for the auto imports.
The pending LCs payments and the all-time high US Dollar against the Pakistani Rupee have resulted in financial losses for the industry.
The CEO of Indus Motor Company, Ali Asghar Jamali, states that the industry needs support from the government on various fronts, including political stability and harmonizing trade relations.
The company is introducing a Hybrid Electric Vehicle and providing interest-free loans to suppliers, but still needs government support to overcome the challenge.
