Honda Atlas Cars (Pakistan) Limited (HCAR), a Pakistani automaker, announced on Thursday that import restrictions would keep its production closed until April 30. It has been closed since the beginning of March.
The business informed the Pakistan Stock Exchange (PSX) of its choice in a notification.
Honda Notification To Inform PSX
“Considering the current economic situation of Pakistan whereby the government resorted to stringent measures including restricting opening of Letters of Credit (LCs) for import of Completely Knocked Down (CKD) kits, raw materials and halting foreign payments, the company’s supply chain has also been severely disrupted by such measures,” read the notice.
“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 April 16, 2023 to April 30, 2023.”
Honda Motor Co. Ltd.’s subsidiary HCAR said earlier this month that its facility would be closed from April 1 to April 15.
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.
After several automakers, including Indus Motor Company Limited and Pak Suzuki Motor Company, were forced to halt production in recent months due to economic difficulties that caused the central bank’s foreign exchange reserves to fall to a level barely able to cover four weeks of imports and forced the government to impose import restrictions, Pakistan’s auto sector is still beset by numerous crises.
To fulfil its obligations for imports and other external payments, the nation lacks the critical amount of dollars.
Due to the repayment of external debt, the State Bank of Pakistan’s (SBP) foreign exchange reserves declined by $36 million to $4.208 billion as of March 31 from $4.244 billion.
The government is still working to appease the IMF to restart the Extended Fund Facility (EFF) program, which if authorized by its board would release a funding tranche of more than $1 billion.
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