Due to Pakistan’s ongoing economic turmoil, two major automakers, Honda Atlas Cars (Pakistan) Limited and Pak Suzuki Motor Company Limited, have announced plant shutdown extensions.
Honda Atlas released a regulatory filing, stating that it is unable to continue production and will close its plant from April 16 to 30. The company’s supply chain has been severely impacted by the government’s restrictive measures, including halting foreign payments and restricting the opening of letters of credit (LCs) for importing CKD kits and raw materials.
Initially shut down on March 8, the plant’s shutdown was expected to end on March 31, but later extended to April 15, marking the company’s longest halt to date.
Pak Suzuki also released a notice, announcing that it would extend its motorcycle plant shutdown until April 28 due to inventory shortages. The company has already been observing non-production days for two-wheelers since March 20, and its automobile plant will halt production on April 7 and 14 due to low inventory levels.
Many automakers have announced complete or partial shutdowns in recent months, citing reasons such as reduced market demand and an inability to maintain inventory as companies struggle to secure LCs.
Pakistan’s auto sector continues to face various crises, with Toyota Motors and Pakistan Suzuki, among other four- and two-wheel makers, repeatedly shutting down their plants, affecting their sales. The companies have also increased their CKD models’ prices, which has further affected people’s already low purchasing power.
The government is attempting to finalize an agreement with the International Monetary Fund (IMF) to revive the stalled Extended Fund Facility (EFF) program, which, if approved by the board, would release a funding tranche of over $1bn.
