Pakistan’s auto assembler Honda Atlas Cars (Pakistan) Limited (HCAR) on Thursday said its plant, which has been shut since the start of March, will remain closed until April 30 amid import restrictions.
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 opening of Letters of Credit (LCs) for import of Completely Knocked Down (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 continued to shut down its plant from April 16, 2023 to April 30, 2023.”
Earlier this month, HCAR, a unit of Japanese car giant Honda Motor Co Ltd, said its plant would be shut from April 1 to April 15.
According to latest data released by Pakistan Automotive Manufacturers Association (PAMA), Honda Atlas reported month-on-month and year-on-year decline in sales by 49% and 77%, respectively, as it sold just 835 units in March 2023.
Pakistan’s auto sector remains engulfed in various crises after a number of automakers such as Indus Motor Company Limited and Pak Suzuki Motor Company were 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 is 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 by $36 million to $4.208 billion as of March 31 down from $4.244 billion due to external debt repayments.
Meanwhile, the government remains busy appeasing 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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