KARACHI: Honda Atlas Cars (Pakistan) Ltd, one of Pakistan’s leading car manufacturers, has extended the shutdown of its plant for another 15 days due to the current economic situation in the country. The closure was originally for a period of 23 days from March 9 to March 31.
The company cites the government’s stringent measures, including restricting the opening of letters of credit (LCs) for the import of CKD kits and raw materials and halting foreign payments, as the reason for the closure. This has severely disrupted the company’s supply chain, making it difficult to continue with production.
In a statement to the Pakistan Stock Exchange (PSX), Honda Atlas secretary said the company was not in a position to continue with its production and would have to continue the shutdown of its plant from April 1 to April 14, 2023.
Other leading auto manufacturers in Pakistan, Indus Motors and Pak Suzuki, have also faced multiple closures of their plants due to similar issues. The government’s measures have led to a shortage of raw materials, particularly CKD material and steel, causing significant difficulties for the auto industry.
The auto industry is a significant contributor to Pakistan’s economy, providing employment opportunities and contributing to the country’s GDP. The current situation has put the industry under immense pressure, with companies struggling to stay afloat due to reduced production and sales.
The temporary closure of Honda Atlas Cars plant is just one of the many challenges faced by the auto industry in Pakistan. The government’s measures to restrict the import of raw materials and components has severely disrupted the industry’s supply chain, causing significant disruptions to production and sales. In the long-term, the auto industry is optimistic about its prospects in Pakistan, given the country’s growing population and increasing demand for automobiles.
One analyst said the industry needs the government’s support to overcome the challenges it faces and emerge stronger in the post-pandemic era.
The government has been urged to take immediate steps to address the issues faced by the auto industry, including the lifting of restrictions on LCs for the import of raw materials and components. The industry has also called for the implementation of policies to promote local production and reduce reliance on imports. Other industries are also facing difficulties in continuing operations due to the current economic situation.
On Friday, Crescent Steel and Allied Products Limited announced the temporary shutdown of its Cotton Division Plant till further notice, while its steel division will remain operational. In a positive move, Ghandhara Tyre and Rubber Company Limited, which previously closed its plant due to the same reasons, has announced it would resume operations from April 5, 2023.