Honda Reduced its Production by 40%

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The pandemic-led supply chain issues still prevail, forcing the automakers to observe production cuts. Honda has reduced its production by 40% amid supply chain and logistics issues. The company is facing difficulties increasing car production in the second half of FY2023.

Reports have revealed that Honda’s Saitama assembly plant in the north of Tokyo will bring its production down by 30%, whilst Suzuka plant in western Japan will reduce its production by 40% approximately.

The Japanese car giant has disclosed that ongoing semiconductor chip shortage and logistics delays are the aftershocks of COVID-19. The production hiccup will affect the Honda Civic, Vezel, and Stepwgn.

Local Car Industry, Facing The Same Fate

Pakistan auto industry is witnessing the same, but the reason behind the slump is aggravating inflation and import curbs.

The recent mechanism of requiring CKD import clearance, introduced by the State Bank of Pakistan (SBP), has urged the automakers to announce production cuts. Pak Suzuki, Toyota Pakistan, Honda Atlas Pakistan, and Hyundai Nishat have left with no option but to observe production cuts.

Granted that the incumbent government is trying hard to overcome the prevailing challenges, but the recent economic repulsions led to import blockades have further worsened the situation.

Car Sales Marks A New Low

Car sales recorded a downturn in consecutive second months in the face of striking Prices, multiplying inflation, and production cuts. After observing a 58% decline in July, sales are not back on track – dropped 2% last month.

As per PAMA (Pakistan Automotive Manufacturers Association) report, automakers sold a total of 11,645 units in August against 11,853 units in July (MoM decline: 2%). Concerning year-on-year sales, sales charts exhibit a massive drop of 46%.

What do you think about prevailing barriers urging the automakers to announce production cuts? Drop your thoughts in the comment section.

 

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