- Decision comes as auto industry continues to struggle with restrictions on imports
Honda Atlas Cars Pakistan has put off its plan to introduce the locally-assembled version of its Vezel (HR-V), an official privy to the development told Business Recorder on Wednesday.
The official, on the condition of anonymity, said the company was earlier testing its Honda Vezel in Pakistan and evaluating feasibility.
However, the company has now reconsidered its decision, a development that comes as the auto industry continues to struggle with restrictions imposed on imports of the sector.
Echoing the views, auto sector expert Mashood Khan said feasibility for launching a new car in Pakistan cannot be conducted at the moment because “no company can launch a car in the present circumstances”.
Khan, a former chairman at the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), said the government’s restrictions on import of completely knocked down (CKD) and completely built up (CBU) units has made manufacturing of current models difficult.
The market should not expect launch of new cars unless the country’s foreign exchange reserves get a boost, according to Khan.
Pakistan moved to restrict imports, especially those of the auto sector, as policymakers looked at ways to stem the decline of the rupee. The currency, under severe pressure due to falling foreign exchange reserves, endured its worst month in over 50 years in July, prompting the government to restrict inward shipments.
In September, the rupee again came precariously close to hitting its all-time low before a minor respite in the last four trading sessions. Since Friday (September 23), the rupee has cumulatively appreciated by Rs7.59 or 3.3% in the inter-bank market.
“The appreciation appears to be a short-lived phenomenon. We hope the government will take concrete steps to sustain and stabilise the economy and subsequently, the local currency,” Khan added.
Earlier, Business Recorder reported that Honda Atlas was preparing to launch the HR-V. At the time, an official said the company might launch a petrol variant in Pakistan.
Despite price hikes, the market share of SUV segment has expanded from 5% to 20% in three years as automobile firms launched several new models, according to a study conducted earlier this year by a car manufacturer.