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Business & Finance HCAR (Honda Atlas Cars (Pakistan) Limited) 111.27 Increased By ▲ 1.62%

Honda Atlas shuts plant till March 31 due to supply chain disruptions

  • Says restrictions on opening of Letters of Credit for import of CKD kits, raw materials and halting foreign payments have hit supply chain
Published March 8, 2023
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Pakistan’s auto assembler Honda Atlas Cars (Pakistan) Limited (HCAR) on Wednesday decided to temporarily shut down its plant from March 9 to 31, citing supply chain disruptions.

The company announced its decision in a notice to the Pakistan Stock Exchange (PSX).

“Considering the current economic situation of Pakistan whereby the Government resorted to stringent measures including restricting the opening of Letters of Credit (LCs) for import of 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 to shut down its plant from March 09, 2023 to March 31, 2023.”

Pakistan’s auto sector remains engulfed in various crises, with a number of automakers announcing complete or partial shutdowns in recent months citing various reasons including reduced demand in the market and the company’s inability to maintain inventory as companies struggle to secure LCs.

Just days ago, Ghandhara Nissan Limited (GHNL), facing major hurdles in import of raw materials and receiving clearance of their consignments from commercial banks, decided to shut down its plant from March 6 to 10.

Meanwhile, the government remains busy in looking to convince the International Monetary Fund (IMF) to revive the stalled Extended Fund Facility (EFF) programme, which if approved by its board would release a funding tranche of over $1 billion.

The country remains short of much-needed dollars to meet its import and other external payment commitments. The central bank’s foreign exchange reserves stand at just over $3.8 billion, barely enough for a month of essential imports. However, they are due to get a boost as a loan inflow from the Industrial and Commercial Bank of China (ICBC) makes its way to the SBP’s forex reserves.

Comments

Comments are closed.

Sohauil Mar 08, 2023 12:23pm
time to increase the prices....maybe 3 times again....
thumb_up Recommended (0)
Kashif ALI Mar 08, 2023 03:37pm
Car Assemblers need to sit down and rework their business model strategy. Assembling a car is not an economical viable business. Technology transfer is imperative along with manufacturing facilities. Otherwise, Pakistani economy is worthy of 660CC ugly Suzuki dabba to 1000CC Cultus cars. The social class Caste system is being nurtured thanks to dumbass economy of this country.
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Dr.Salaria, Aamir Ahmed Mar 08, 2023 04:57pm
About tine for Honda to permanently shut down. Honda cars can be shipped (imported) from Iron Brother China via CPEC
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Ayub Mar 08, 2023 06:57pm
Pakistan needs water-fuel cars invented by a proud Pakistani Muslim Scientist. We don’t have petrol to drive these foreign cars.
thumb_up Recommended (0)
zh Mar 08, 2023 11:43pm
It is preposterous to suspend the policemen. They did not act on their own. They were following the orders. If the government is serious about curbing the police overreach, they should dismiss the person the person who is ultimately responsible and the man is Sanaullah.
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