Honda Pakistan has again announced that the automobile assembly plant in Pakistan will extend its longest shutdown to date by an additional 15 days.
In a statement to the Pakistan Stock Exchange (PSX), the automaker explained that this decision was made in light of Pakistan’s current economic conditions.
The company’s notice, dated March 8, 2023, outlined that the government’s strict measures have significantly disrupted its supply chain. These stringent measures include limiting opening LCs for CKD kit and raw material imports and halting foreign payments. Consequently, the automaker cannot continue production and has extended the plant shutdown from April 1 to 15.
It is worth noting that the initial shutdown was announced on March 8 and was expected to last until March 31. The automotive sector has faced numerous challenges, with several manufacturers announcing complete or partial shutdowns in recent months. Reasons for these shutdowns vary, including reduced market demand and companies’ inability to maintain inventory due to difficulties securing LCs.
Import restrictions implemented by the coalition government to control the trade deficit have also impacted the industry. Toyota Motors, Pakistan Suzuki, and other vehicle manufacturers have periodically closed their plants, affecting sales. Additionally, these companies have increased the prices of their CKD models, further reducing consumers’ purchasing power.
Pakistan currently faces a shortage of dollars to fulfill import and other external payment obligations. The nation’s foreign exchange reserves amount to just over $4.2 billion, barely covering a month’s essential imports.
At the same time, the government is working to persuade the International Monetary Fund (IMF) to resume the program.
