Pakistan’s auto assembler Honda Atlas Cars (Pakistan) Limited (HCAR) on Friday said its plant, which has been shut since the start of March, will remain closed until April 15 due to supply-chain disruptions.
The company announced its decision in a notice to the Pakistan Stock Exchange (PSX).
“Further to our letter dated March 08, 2023 and considering the current economic situation of Pakistan whereby the Government resorted to stringent measures including restricting opening of LCs (Letters of Credit) for import of CKD (Completely Knocked Down) 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 continued to shut down its plant from April 01, 2023 to April 15, 2023.”
Earlier this month, HCAR, a unit of Japanese car giant Honda Motor Co Ltd, said its plant would be shut from March 9 to March 31.
Pakistan’s auto sector remains engulfed in various crises, with a number of automakers such as Indus Motor Company Limited and Pak Suzuki Motor Company also forced to halt production during recent months due to economic difficulties that have seen central bank foreign exchange reserves drop to a level barely able to cover four weeks of imports and lead the government to impose import restrictions.
The country remains short of much-needed dollars to meet its import and other external payment commitments. Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased $354 million, clocking in at $4.2 billion as of March 24, data released on Thursday showed.
This is the first decline in central bank-held reserves on a weekly basis after six successive increases. The overall number stands at a critical level at around a month of import cover.
Meanwhile, the government remains busy in trying 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.
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