Honda Atlas Cars (Pakistan) Limited, a subsidiary of Honda Motor Co., Ltd., Japan, on Tuesday announced a temporary shutdown of its plant, citing supply chain disruptions.
“In pursuance to our letter dated October 30, 2023, the company has decided to further extend the shutdown of its plant from November 08, 2023, to November 09, 2023,” said Honda Atlas Cars in its notice to the Pakistan Stock Exchange (PSX).
“Any change in plan will be updated accordingly,” it added.
Last month, the automaker announced to shut down its plant from October 24, 2023 to October 31, 2023, which was later extended to November 07, 2023.
The company back then said that the current level of inventory and parts shortages of the company’s supply chain has been severely disrupted.
“As a result, the company is not in a position to continue with its production,” it had said.
Earlier this year, the automaker shut its production activity from March 09 to May 15, citing deteriorating economic situation in the country and government restrictions over the issuance of Letters of Credit (LCs).
As per Honda’s latest financial results, the company’s profit-after-tax stood at Rs144.96 million in 1QFY24, a decline of nearly 78%, as compared to Rs658.2 million recorded in same period last year.
Auto sector woes
The country’s auto sector, hugely dependent on imports, was hit hard by the government’s decision to curb imports and restrict issuance of LCs. Additionally, higher finance cost and massive increase in car prices have also reduced demand from consumers.
In the first quarter of FY24, sales stood at 20,983 units, down 40% as compared to the the same period in the previous year.
“The automobile industry in Pakistan is facing demand challenges, primarily driven by high prices, costly auto financing, and a surge in taxes, resulting in a YoY decline in sales,” Deputy Head of Research, JS Research, Waqas Ghani told Business Recorder earlier.
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