After Shell, Toyota to shut operations permanently and leave Pakistan, claim netizens

Days after British oil and gas company Shell announced that it would exit Pakistan, Toyota is likely to shut its operations permanently and exit the cash-strapped country, Twitter users claimed on Sunday. 

Twitter is flooded with claims that Indus Motors, which makes Toyota vehicles in Pakistan, is set to permanently shut down its plant. However, there is no confirmation yet from the automaker.  

"According to the report, Toyota Indus Motors is set to permanently Shutdown their Plant in Pakistan and leave Pakistan permanently," said Safar Khan, a journalist based in Balochistan.

Nakvi, another Twitter user, shared the same news and wrote: "Sources Claim That Toyota Indus Motors is set to permanently Shutdown their Plant from Pakistan and leave Pakistan permanently."

Jehanzeb Nawaz, a stock trader, sought some clarification on the report that Toyota Indus was shutting its operations in Pakistan. "If the news is correct then What will be the status of cars already booked if any? Advance payments. Liabilities. Dealerships etc. & if a false rumor what legal action are u people considering against this kind of nonsense."

Earlier this month, Toyota Indus Motors halted its production due to a disruption in the company's supply chain, according to ARY News. In a letter to the general manager of the Pakistan Stock Exchange, the company management said its production would be shut down due "delay in opening of Letters of Credit (LC) and inventory shortages".

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Indus Motors said that its vendors continued to face hurdles in the import of raw materials and receiving clearance of their consignments, on account of challenges in opening of LCs and supply chain issues. "This has disrupted the supply chain and the vendors are unable to supply raw materials and components to the company. It has insufficient inventory levels to maintain production, therefore the company is unable to continue its production activities," the letter said.

This was the second time the company halted its production. In December last year, the company shut down its operations citing a delay in import approvals from the State Bank of Pakistan (SBP). The company said Pakistan's central bank had introduced a new mechanism for obtaining prior approval for the import of “CKD kits and components of passenger cars" for the auto sector.

"The aforesaid delay in the approvals for the company and vendors has created hurdles in the import and clearance of consignments for raw materials and components of the company. This has resulted in insufficient inventory levels and consequently has created an adverse impact on the supply chain and production activities," the letter stated according to Dawn.

Pakistan has been facing a serious dollar shortage, which has forced it to impose several restrictions to stave off default. However, some of the restrictions have seriously affected the industries and caused massive job cuts.

Earlier this week, Shell Pakistan said that its parent company, Shell, would be exiting Pakistan with the sale of its 77 per cent shareholding in the local business. The move came after Shell made several announcements about its global operations and after Shell Pakistan (SPL) suffered losses in 2022 due to exchange rates, the devaluation of the Pakistani rupee, and overdue receivables, and as the country faces a financial crisis and economic slowdown, according to Reuters.

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