ISLAMABAD – Honda Atlas Cars Pakistan announced another extension to its longest plant shutdown this fiscal year, flagging the country’s economic crisis, as the auto industry is bearing the brunt amid limitations on opening LCs for imports.
The two-week extension to its longest plant shutdown this year comes as Honda, one of the leading car manufacturers, failed to continue production for the last 50 days.
Honda first announced shutdown on March 8 which continued till the end of the month. The carmaker then prolonged the shutdown to April 15 which was later extended for the next two weeks. The recent shutdown is the fourth plant closure since the start of this year, and it would continue till May 15.
In a notice to Pakistan Stock Exchange, the company again flagged stern measures to deal with the economic situation which ‘severely disrupted’ the company’s supply chain. “As a result, the Company is not in a position to continue with its production and ultimately has continued to shut down its plant from May 01, 2023, to May 15, 2023,” the notice reads.
Pakistan’s auto industry on verge of collapse
Honda, Toyota, Suzuki, and other players are facing severe issues amid dilapidating foreign reserves and a shortage of US dollars, and all banks are denying the opening of letters of credit (LCs) for nonessential items.
The country’s auto industry has been facing severe issues mostly due to import curbs while carmakers are offering customers to cancel bookings and claim refunds.
Amid staggering price hikes, the sales of several vehicles also plunged as the auto industry bears the brunt amid an uncertain economic situation.
Pakistan’s auto industry is mostly dependent on imports and remained under stress amid the shocking depreciation of the local currency, and imposed curbs on the LCs.
Not a single Honda Civic was sold in March this year with auto-industry in doldrums
