Pak Suzuki has extended the shutdown of its Karachi plant due to a shortage of semiconductors affecting the global auto industry. The shutdown resulted in reduced production and sales, affecting the company’s revenue and market share in Pakistan.
Semiconductor shortages have been a global problem, with many automakers facing production delays and shutdowns due to insufficient supply. Pak Suzuki’s decision to extend the plant shutdown comes as the shortage affects their car production. Pakistan Motorcycle Assemblers Association (APMA) President Muhammad Sabir Shaikh has expressed concern over the lack of completely knocked down (CKD) parts in the country’s bicycle and automobile industries.
“Lack of access to CKD parts has halted production lines and reduced the number of customers for new cars and motorcycles. “Furthermore, no new letters of credit (LCDs) were opened and the price of CKD parts rose to unprecedented levels, resulting in an over 22% increase in car rental prices, making it difficult for customers to get new cars at affordable prices,” Sheikh lamented.
According to a statement released by Pak Suzuki: “Due to the ongoing shortage of semiconductors, we are forced to extend the closure of our factories. We are working with our suppliers to resolve this issue, but will not be able to resume production until the supply chain is stabilized. “
Abdul Rehman Aizaz, former president of the Pakistan Association of Auto Parts Manufacturers (PAAPAM), expressed concern about the future of the industry. “The government forbids the import of components or raw materials. In the future, the tractor and motorcycle categories will continue to decline. If imports are allowed, the industry could recover up to 40% of the 2021-2022 volume. “
He also added that 60% of the market has already been hit by heavy depreciation and new tariffs, and it will take at least three years to reach 300,000 car sales again, signaling a very poor outlook for foreign direct investment. He is also concerned about the loss of 1 million jobs in Pakistan’s automotive industry.
Despite big price increases and higher taxes, the auto industry won’t be taxed as much as 50 percent of the dollar this year, he said. The extended suspension also affected the company’s sales, with demand for its vehicles falling. Pakistan’s auto industry has been hit hard by the epidemic and a shortage of semiconductors, resulting in reduced production and sales worldwide. Despite the challenges, Pak Suzuki remains committed to the safety and well-being of its employees, customers, and partners. The company is also focusing on finding alternative solutions to overcome the semiconductor shortage and resume production as soon as possible.
Pak Suzuki is one of the companies affected by the semiconductor shortage that has disrupted the global auto industry. The prolonged plant shutdown has affected the company’s production and sales, but it remains committed to finding solutions and overcoming challenges. The industry’s recovery from the pandemic and semiconductor shortage will take time, but through collaboration and innovation, it is possible to overcome these challenges and become stronger.
