KARACHI: Indus Motor A major Japanese automaker has announced that due to the non-availability of components, production will stop for three days, while assemblers and manufacturers are opting for expensive air shipments of parts and accessories due to immense delays caused by congestion at ports across Asia.
“Ali Asghar Jamali, Chief Executive Officer of Indus Motor Company (IMC), told Dawn that we have agreed to close production on Friday, Monday and Tuesday and will try to compensate production losses by calling staff in the future for overtime.
He said that due to continuing port congestion in Asia, the delivery of imported parts is facing delays of two weeks, prompting assemblers and vendors to go for air lift inputs to avoid any disturbance in vehicle production lines.
He said appreciating the value of the rupee against the dollar could cover the rise in air shipping charges. He said, “We roll out 260 vehicles a day.”
Overall vehicle production in the country dropped by 14.4 percent to 39,175 units in 4MFY21, while performance in October also plummeted from 12,117 units in the previous month to 11,601 units.
Munir K. Bana, CEO of Loads Ltd, said In the past month, we have airlifted components from Japan and Thailand for the manufacture of exhaust systems for two leading Japanese car assemblers Indus Motor.”
Munir added that to accommodate the unexpected rise in demand from the assemblers, emergency airlifting of parts had to be planned as the shipments were trapped in transit and supplies were also postponed due to backlog in different Asian countries.
A Honda Atlas Cars Ltd (HACL) executive said “we face a shortage of CKD parts due to sudden market growth plus our expected arrival of parts is also a concern due to port congestion, resulting in production delays at higher costs in addition to air shipments.”
Honda Civic and City development decreased to 1,719 units in October from 2,261 units in September.
Chairman Abdul Rehman Aizaz of the Pakistan Association of Automobile Parts and Accessories Manufactures (PAAPAM) said the decision of the State Bank to cut interest rates to 7pc from 13.25pc in March has revived the automotive industry, but new problems have also been raised by these higher volumes .
In the last week of September, sourcing of raw materials and sub-components from foreign suppliers has become a challenging challenge, he added, adding that the cost of sea freight from China Indus Motor has also swelled from $600-$700 in the last two months to $1,800-$2000 per 20-ft container.
Raw materials such as aluminium, zinc, steel and plastics have reported a leap of 40-50pc from July to date due to worldwide supply chain disturbances, resulting in bludgeoning production costs for producers of car parts, he added.
He said that from August 27 to date, the value of the rupee has increased by more than five per cent, while the Chinese currency against the dollar has also gained ground by seven per cent in four to five months. 6.6 yuan is currently equivalent to one dollar, which was 7.2.