Amid the current economic situation and non-availability of LCs by the State Bank of Pakistan (SBP), Honda Atlas Cars (Pakistan) Limited has announced another plant shut down. The company made the announcement in a notification to the Pakistan Stock Exchange (PSX).
In the notification, the car assembler wrote, consider the current economic situation of Pakistan whereby the government restored to stringent measures including restricting the opening of LCs for import of CKD kits, raw material and halting foreign payments, such measures have severely disrupted the company’s supply chain.
As a result, the company is not in a position to continue with its production. “Ultimately, it has to shut down its plant from March 9, 2023, to March 31, 2023.
A Wave of Plant Shut Downs
Pertinently, this is not the first plant shut down by Honda or other local car assemblers. Pak Suzuki kept its production at a halt during the month of January 2023. In October 2022, Honda announced a week-long shut down of its plant, citing disruption in the supply chain. “Considering the current economic situation of the country, the government has resorted to stringent measures, including minimising the import of CKD kits and raw materials; the company’s supply chain has also been disrupted by such measures,” the notification by the company read.
Similarly, a month prior, Toyota Pakistan announced a halt in production and related assembly of its cars from September 1-14 in the face of a procedure regarding CKD import approval from the State Bank of Pakistan (SBP). As per the company’s notification, the new mechanism came with some barriers to importing CKD Kits, which are gearing inventory problems.
The worrisome aspect of this whole situation is that the SBP still hasn’t opened LCs for the import of CKD kits, resulting in the scarcity of production material, eventually leading to no production at all. Hence, the coming days also seem to be as bleak as the past few months, as the country is still phasing through a serious economic crisis.
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