The auto sector of Pakistan has been affected badly due to the State Bank of Pakistan’s (SBP) import restrictions and ongoing depreciation of the rupee, Indus Motor Company Limited (INDU) has said.
A corporate briefing of INDU was held on November 8. The financial results and the future outlook was discussed in the meeting in which officials disclosed the issues faced by the company.
The depreciation in the rupee’s value has largely put the burden of increased production costs whereas the economic slowdown in the country has impacted the demand, the officials stated in the meeting.
It was also discussed that high-interest rates coupled with augmented duties and taxes on vehicles have been causing challenges for the auto sector. The participants of the meeting have demanded that the import restrictions should be removed. According to INDU officials, the auto sector alone comprises three percent of the total import bill of the country.
It was also informed that the localization rate of Corolla and Yaris stood at 65 percent while it was 55 percent for IMV and Fortuner.
According to Arif Habib Limited it was predicted that there would be another quarter of manufacturing loss if the import restrictions were not removed. AHL has also said that the recent flood devastations, higher inflation and less purchasing power will hurt the entire auto sector in the future.
According to the data of Pakistan Auto Manufacturers Association the sales of the auto sector of the country have declined by more than 50 percent to 34,472 units in first quarter of ongoing fiscal year compared with 68,897 units same period of last year.