Pakistan facing economic crisis, Honda will keep its production plant closed this month

March 9, 2023

Pakistan’s Automobile Industry: According to several media reports, Honda Atlas Cars Pakistan (HACP) has announced that it will shut down its plant due to the ever-decreasing currency value and higher tax rates. This closure will be applicable from 9 March to 31 March 2023. The company said that it is no longer possible for it to continue production, so it will keep its plant closed for the remaining days of this month. In a notice sent to the Pakistan Stock Exchange, Honda Atlas Cars said that its supply chain has been severely disrupted.

What did the company say?

Along with this, the company has said that, keeping in mind the current economic situation of Pakistan, the government has banned foreign imports of CKD kits and raw materials. Due to which the supply chain of the company has also been seriously affected. The HACP said, “The company is not in a position to continue its production and will eventually have to shut down its plant from March 9 to March 31.”

These companies have stopped production

Before Honda, Indus Motor Company (IMC) and Pak Suzuki Motor Company (PSMC) have also announced the closure of their production plants.

Dependence on import

Pakistan’s automobile industry mainly depends on imported raw materials. Now after the decrease in the currency value there, there has been a lot of crisis on the exchange rate. According to a media report, here the government has also banned the letter of credit.

not enough money

Also, almost all the automobile companies in Pakistan have increased the prices of their CKD models. At present, the foreign exchange reserves of the Central Bank of Pakistan are 3.8 billion US dollars, which is absolutely not enough for one month’s import.

The Government of Pakistan is constantly trying to get the support of the International Monetary Fund. Through which it will collect an amount of USD 1 billion by expanding the Extended Fund Service Program.