Toyota To Stop Production in Pakistan and Offer Refunds to Customers

Toyota Indus is reported to have stopped producing its cars in Pakistan and may have to refund deposits on reserved vehicles.

Toyota said that the primary cause of the production delay was the restrictions on the LC permission for CKD (completely knocked down units) imports from the State Bank of Pakistan. The corporation also noticed two weeks of idle manufacturing in June and July, which delayed production.

According to our sources, the corporation will formally reveal its production delay scenario the following week. Customers who are unable to wait for delayed delivery will also receive refunds for any advance payments they made on Toyota Indus vehicles. Toyota Indus may have to stop all manufacturing if the situation doesn’t improve.

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The State Bank of Pakistan has limited the opening of Letters of Credit (LC) to a number of industries, including the automotive sector, as a result of the devaluation of the rupee in the global market. This has disrupted the manufacture of vehicles and delayed deliveries as a result.


Some businesses have completely halted production as a result of the present economic climate. The non-issuance of LC is one of the primary causes of that.

What is Letter of Credit (LC)?


Businesses utilize the Letter of Credit as a financial tool for international banking transactions when importing products from other nations. LCs must be processed by a nation’s central bank, in Pakistan’s case, the State Bank.

The State Bank offers foreign exporter banks a sovereign assurance that Pakistani importers will uphold their payment agreements. In the absence of State Bank authorization, enterprises cannot import.

The State Bank has been asked to limit imports because foreign exchange reserves have dropped to dangerously low levels. Even Changan’s chairman has made a statement warning that the LC problem may force the business to halt production for two months.

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