Both of you are incorrect in your own definitions of bankruptcy. Honda isn't bankrupt but yes it has been in losses for a decade now. Not that it matters, because they have continually been getting investment from Honda Japan which is majority shareholder in Honda Atlas. I don't know why they are still continuing operations in Pakistan as none of their strategies seem to work (i.e. take the company into profit). One reason to continue may be brand image or reputation or good will etc. which is not represented on a balance sheet but is still a major factor affecting decision making.
On the other hand, Toyota Indus guys are also not that far sighted or gifted that they would anticipate lower sales of 1.8 variant and act proactively to launch 1.6 or gain market share etc. There must be another run of the mill reason behind launching 1.6. We can all speculate all we want, but we wont get to know the actual reason till a year or two from now.