Honda Atlas Cars Pakistan said on Friday that the closure of its plant will now last until May 15, 2023.
The company wrote in a notice to the Pakistan Stock Exchange (PSX) that “further to our letter dated April 13, 2023, and considering the current economic situation of Pakistan whereby the government resorted to stringent measures including restricting opening of LCs for import of CKD kits, raw materials, and halting foreign payments, the company’s supply chain has also been severely disrupted by such measures.”
According to the report, “as a result, the company is not in a position to continue with its production and has ultimately continued to shut down its plant from May 1, 2023 to May 15, 2023.”
Honda Atlas Cars Plant Closure Since March 9
Since March 9, 2023, the company has been observing a plant shutdown. Production was scheduled to resume on April 1 but the suspension was postponed twice, first until April 15 and then until April 30.
Honda Atlas sold only 835 units in March 2023, according to the most recent data from Pakistan Automotive Manufacturers Association (PAMA), which showed a 49% and 77% fall in sales month over month and year over year.
The auto industry in Pakistan is still experiencing numerous difficulties, and in recent months, a number of manufacturers have announced full or partial shutdowns, claiming a variety of factors, including as decreased market demand and the inability of the company to keep inventory as they struggle to obtain LCs.
To fulfil its obligations for other foreign payments as well as its ongoing import demands, the nation still lacks critical funds. According to information issued previously, the State Bank of Pakistan’s (SBP) foreign exchange reserves climbed by $30 million as of April 21 to total $4.46 billion.
The Extended Fund Facility (EFF) program is currently dormant, but the government is still seeking to persuade the International Monetary Fund (IMF) to restart it. If the IMF’s board approves the program, a funding tranche worth more than $1 billion would be released.
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