Honda Pakistan ‘prepares to resume operations’ after months-long closure

Honda Atlas Cars (Pakistan) Limited, the assembler of Honda-brand vehicles, announced that it is now preparing to resume plant operations in the coming weeks, amid improvement in trade finance facilities.

The automaker shared the development in a notice to the Pakistan Stock Exchange (PSX) on Monday.

“With the consistent efforts of the company and slight improvement in accessibility of trade finance facilities for the supply chain, the company is now preparing to resume its production in the weeks ahead, with the hope to increase the same gradually,” read the notice.

Last month, Honda Atlas announced the extension of its plant shutdown till May 15, 2023.

“Considering the current economic situation of Pakistan whereby the government resorted to stringent measures including restricting opening of 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.

“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 May 1, 2023 to May 15, 2023,” said the company back then.

The firm has been observing a plant shutdown since March 9, 2023.

According to latest data released by Pakistan Automotive Manufacturers Association (PAMA), sales of cars, light commercial vehicles, jeeps and vans declined by over 80% year-on-year (YoY) to 4,463 units in April amid growing economic and political uncertainties.

Pakistan’s auto sector, highly dependent on imports, has remained 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 they struggle to secure LCs.

Meanwhile, the government remains engaged 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.