KARACHI: Hinopak Motors Limited (Hino) announced non-production days at its plant on Tuesday, adding Hino’s name among a number of companies facing inventory shortages on import curbs in the country.
The assembler and manufacturer of buses and trucks shared the development in a notice to the Pakistan Stock Exchange (PSX).
“The company has been facing hurdles in opening of LCs [letters of credit] for the import of CKDs [completely knocked down] and other raw materials,” the notice read. “Accordingly, the company is not in a position to continue with its production activities and has to temporarily shut down its Chassis Assembly plant from March 24, 2023 to April 04, 2023.”
Hino is incorporated in Pakistan as a public limited company. The company’s principal activity is the assembly, progressive manufacturing and sale of Hino buses and trucks. It’s a subsidiary of Hino Motors Limited Japan and the ultimate parent company is Toyota Motors Corporation Japan.
The company cited that current economic situation of the country and commercial banks’ inability to facilitate the imports of the auto sector had forced it to take a production break.
The State Bank of Pakistan is prioritising the imports of essential items only, as the country is in the midst of its worst ever economic crisis. LCs are being delayed or declined because the central bank’s reserves are standing at just $4.3 billion as of March 10, which can cover only less than a month’s import bill.
The import-led auto industry is struggling to survive in these import hurdles, which may continue to a few more months at least.
On Monday, Ghandhara Tyre and Rubber Company Limited, which manufactures and trades tyres and tubes for automobiles and motorcycles, also announced a production cut from March 24 to April 3, citing supply chain disruptions on the LCs fiasco. The company had earlier taken a production break from February 13 to February 17.
Pak Suzuki and Honda Atlas have already announced to observe non-production days till end of March.
Despite a prevailing economic turmoil in the country, buses and trucks saw an increase to 657 units in February 2023, from 546 units in the same month last year, according to data shared by Pakistan Automotive Manufacturers Association.
As Pakistan faces a balance of payment crisis, import curbs are expected to ease once the country reaches a deal with the International Monetary Fund (which has been delayed) and receives foreign inflows from other countries.