Overview
The automotive industry struggling and fail to provide deliveries of vehicles timely. A car purchase becomes more difficult in Pakistan with high rates of local cars. The government has completely banned used and new car imports in Pakistan and increased tax on CKD kits imports. Locally assembled cars are the only option in brand new cars purchase. The automotive industry is affected for multiple reasons and automakers have stopped booking cars. IMC Toyota has sorry to its customers for to delay in already booked cars. This is a very difficult time for the automobile industry where they cannot meet the demand for vehicles and are not able to offer low prices and are not in the condition to offer any promotion.
Toyota Statement
The officials of Toyota say Sorry to its customers and stated that the deliveries of cars are delayed due to the State Bank’s LC approval constraint for CKD import and the drastic change in rupee value. Toyota is trying to resolve the issues and try its best to deliver already booked vehicles and reopen bookings for new cars.
Why Car Bookings Are Closed
The depreciation of the rupee value against the dollar and the drastic increase in CKD kits tax has the major reasons for delayed in-car deliveries. The government has completely banned the used and new imported cars which cause an increase in local cars demand. For the import of CKD kits, local companies need to get their Letters of Credit (LCs) approved by the State Bank of Pakistan. State Bank has closed the issuance of LCs to control the import bill burden. The government has banned imported items to control the import bills. Automakers need to get approval for LCs to make manufacturing work in a smooth routine.
Conclusion
When the struggling stage becomes gaining for the automobile industry isn’t confirmed because now LCs approvals is a big challenge for them. Automakers requested the government to lift the restriction on CKD kits import and approved their LCs. The government has found the only solution to get off from the economic crisis by controlling the import bills. The depreciation of the rupee value causes to pay heavy import bills.
