Due to disruptions in the supply chain, Honda Atlas Cars Pakistan Limited (HCAR) has made the decision to shut down its plant temporarily starting from March 9 to March 31.
The automobile company issued a notice to the Pakistan Stock Exchange (PSX), revealing that the government’s constraints on importing completely knocked down (CKD) kits and raw materials, as well as the suspension of foreign payments, have adversely affected the supply chain. As a result, the company is unable to operate under such unfavorable conditions.
“Considering the current economic situation whereby the government has resorted to stringent measures including restricting the opening of Letters of Credit (LCs) for import of CKD kits, raw materials and halting foreign payments, the company’s supply chain has been severely disrupted by such measures,” the notice stated.
“As a result, the company is not in a position to continue with its production and ultimately has to shut down its plant from March 9, 2023 to March 31, 2023.”
The government’s stringent measures to conserve foreign currency and a decrease in market demand have compelled several automobile manufacturers to either shut down their operations completely or partially.
Currently, Pakistan’s foreign exchange reserves are quite low, and the government is working on persuading the International Monetary Fund (IMF) to restart the Extended Fund Facility (EFF) to obtain a loan tranche worth over $1 billion.