Following a lengthy production pause, Honda Atlas Cars said it was planning to restart manufacturing in the upcoming weeks, according to reports in the media on Tuesday.
It should be mentioned that the manufacturer has started working on a resumption plan following an improvement in the supply chain’s ability to access trade financing facilities.
The manufacturer of vehicles under the Honda brand has been on a manufacturing hiatus for more than two months due to the nation’s economic slump.
Due to Pakistan’s small foreign exchange reserves, the government implemented a number of harsh measures, including a ban on letters of credit (LCs) for the import of completely knocked-down (CKD) goods and raw materials for the car industry.
Honda stated in a stock filing on Monday that it is getting ready to resume production in the next weeks with the intention of gradually increasing it thanks to its ongoing efforts and a little improvement in the accessibility of trade finance facilities for the supply chain.
From March 9, Honda announced a halt to its production activity, which it has up to this point maintained. According to the previous warning, the corporation was to suspend operations until May 15; however, the notice from Monday indicated that the suspension would last for a few more days.
The business has cited the nation’s economic circumstances, limitations on LCs for the import of CKD kits and raw materials, and a stoppage in foreign payments as some of the reasons for these issues.
Due to lower customer affordability brought on by increasing mortgage rates and vehicle costs, non-production days, rupee depreciation, and rising gas prices, the auto sector is experiencing severe setbacks. The industry has also seen layoffs as a result of the facility closures.
According to Pakistan Automotive Manufacturers Association’s most recent figures, passenger car sales in April decreased by 85% to 2,844 units from 18,626 units in the same month last year.
A total of 88,620 units have been sold in the first ten months of the fiscal year 2022–23, which is a 54% decrease from the 191.238 units sold in the same period last fiscal year.
