Pakistani multinational corporations intend to close their mobile phone production facilities. The first step has been decided after thoroughly assessing Pakistan’s economic status. The plan to shut down the assembly in Pakistan was made because of a shortage of money. According to reports, some significant phone manufacturers have stopped operating their production lines.
The multinational Pakistani corporation will close mobile phone production due to many reasons. Pakistan’s economic position is the main reason that major cellular companies are planning to shut down assemblies in Pakistan. The specific businesses which are closing local production in Pakistan are not identified in the report. There are several well-known phone manufacturers in the nation, including, Infinix, Tecno, Xiaomi, and a few others, although it is unknown which of these companies has stopped manufacturing phones.
This guide will help you to know the several reasons behind this closure;
The first reason that cellular companies are planning to close their production is due to a shortage of dollars. Due to a lack of dollars, global corporations have begun closing their mobile phone assembly facilities in Pakistan. Another reason is the difficulty related to importing mobile phones. Importing mobile phone accessories poses difficulties for the commercial sector as well. A firm will have a great risk if products don’t arrive due to a letter of credit (LC). However, it is still unknown what companies have decided to shut down the assembly line.
However, import costs are rising faster than ever due to the recent shutdown of assembly lines. As a result, the cost of smartphones is increasing rapidly. The smartphone was between 45,000-50,000 PKR previously, but now it costs PKR 80,000. The business has been prohibited from importing raw materials since May 20, and the monthly production cost of those managing the manufacturing facilities is close to $195 million. Pakistan has been working hard to save its precious foreign exchange reserves, which have decreased to $8.2 billion and are not enough to meet the import bill for several weeks. About 12 smartphone manufacturing facilities had to shut down due to the ban on the import of raw materials, while some of the reports mentioned that 18 feature phone factories had to halt production.
Its Impact On Pakistan
It can only mean bad news for Pakistanis. Local smartphone production was a main factor due to which some smartphone brands were still affordable a few years ago. However, costs for smartphones have also been rising sharply as a result of this shutdown. The same is true for premium smartphones made by brands like Infinix, Tecno, and others. All these well-known companies uphold the idea of providing premium mobile prices at affordable rates. The closure of these famous brands brings a lot of difficulty for Pakistani customers.
The fact that corporations intend to shut down production is difficult to comprehend. However, a few years ago, the affordability of some models was due to local smartphone production.
The country’s economy used to gain from above-average domestic smartphone manufacturing. This action had a favourable effect on the Pakistani administration. In 2021, 24.66 million mobile devices were produced in the area.13.05 million in 2020, which represents an 88% growth. However, the overall number of cell phones produced locally increased to 24.66 million in December 2021, up 2.54 million from the previous month. More than 25 companies received licenses from Mobile Phone Manufacturing (MDM) to continue with their business in Pakistan.
In this guide, we have provided a detailed overview that why cellular companies are planning to shut down their operations.
These are some of the reasons behind the closure of cellular companies in Pakistan. Many top-notch smartphone brands, including, Infinix, Tecno, Samsung, and others few brands have decided to close their production. Hence the official announcement is not made yet. Many sectors other than the mobile phone business are in danger due to political and economic disasters.
Although the IT sector is doing well, new changes and difficulties could make the route less clear. If given support, this sector has the potential to provide foreign exchange that can support the nation and close the balance of payments gap in addition to revenue.