KARACHI: As two leading Japanese vehicle assemblers are in quandary, Pak Suzuki Motor Company (PSMC) has taken its parts suppliers into confidence by assuring them that it will neither cut production nor resort to plant shutdown in weekdays in July-December.

In a suppliers’ coordination meeting held at a local hotel on Wednesday, the management of PSMC shared their production plans for July-December.

Some vendors who attended the meeting said the company would produce over 76,000 units in the second half of current year, compared to 60,000 unites rolled out in the first.

The management had assured vendors that the production targets of 2019 are same as those fixed at the start of year. It also said there is no need to worry as the company has got a big opportunity to fill the vacuum of used small cars whose imports had been curbed by the government through various measures from January onwards.

Vendors said PSMC had the advantage of making low-priced cars on which the federal excise duty (FED) imposed in budget 2019-20 is also low compared to high end models being produced by Indus Motor Company and Honda Atlas Cars Pakistan (HACP) where the impact of FED is higher.

“We are happy that PSMC has given positive production outlook for July-December besides showing commitment to achieve production target of 2019,” vendors said adding the company’s management has also asked them to jointly work on further localisation of parts as well as production of hi-tech parts for various models.

Contrary to this, IMC has revised its assembly plan on July 10 for all its vehicles and would now assemble 3,521 units in July, instead of 5,061 as earlier planned on July 3.

In terms of overall units, Corolla’s production would drop to 2,890, from 4,430 in the current month.

A Toyota vendor, on condition of anonymity, said the company would make total 3,850 units instead of 5,307 for August. Corolla’s production is estimated at 3,320 instead of 4,650 units.

Meanwhile, IMC aims assembly of 4,101 units in September as against 4,818 out of which Corolla production is planned at 3,500 versus 4,217 units.

The company plans to roll out 4,101 units in September as against the initial plan of 4,818 while Corolla volume would sink to 3,500, from 4,217. Similarly, October target has been revised downward to 4,320, from 5,990 of which the expected Corolla production is down to 3,700, from 5,298 units.

Meanwhile, an authorised dealer of Toyota said only one to two vehicles are being booked on a daily basis as against five to six vehicles in previous months. “The situation is almost the same in other Toyota showrooms,” he claimed.

Market is also abuzz with news that IMC would roll out Toyota Yaris 1,300cc as a replacement for Corolla XLI and GLI either in the last quarter of 2019 or early next year.

Previously, the company had planned to introduce Toyota Vios but has changed its plan.

Toyota vendors, who asked not to be named, said the parts making for Yaris has already commenced. They said they would supply parts to IMC hopefully by November and December so that Yaris could come out from the assembly plant either by January or February 2020.

Another vendor, asking not to be named, also confirmed to Dawn regarding the rolling out of Yaris either by end of this year or early 2020 with no change in plan yet despite a turbulent period in terms of sales started from July. “Vendors have already started parts development of Yaris,” he said.

However, when contacted, IMC CEO Ali Asghar Jamali declined to comment on the matter.

Increase in FED, multiple price shocks on account of rupee depreciation, additional customs duty on import of parts, high interest rates and soaring petroleum prices had adversely hit HACP and IMC.

HACP had closed down production from July 12-21 amid slowdown in fresh orders and depressed sales on account of meteoric rise in prices.

Published in Dawn, July 18th, 2019