Honda Atlas, Pak Suzuki extend plant shutdowns amid import restrictions

The companies announced decisions in separate notices to the Pakistan Stock Exchange

KARACHI (Web Desk/Reuters) - Leading auto assembler in Pakistan -- Honda Atlas Cars (Pakistan) Limited (HCAR) -- on Thursday said it is extending plant shutdown plant until April 30 amid restrictions on imports. The automaker has been observing shut down since early March this year.

The company announced its decision in a notice to the Pakistan Stock Exchange (PSX).

“Considering the current economic situation of Pakistan whereby the government resorted to stringent measures including restricting opening of Letters of Credit (LCs) for import of Completely Knocked Down (CKD) kits, raw materials and halting foreign payments, the company's supply chain has also been severely disrupted by such measures,” read the notice.

“As a result, the company is not in a position to continue with its production and ultimately has continued to shut down its plant from April 16, 2023 to April 30, 2023.” 

-- Honda Atlas extends longest production shutdown to end April --

According to Reuters, Honda Atlas Cars Pakistan Ltd has announced a 15-day extension to its longest plant shutdown this fiscal year, citing the country’s economic crisis, restrictions on opening letters of credit for imports, and halting foreign payments.

The company announced an initial 23-day shutdown on March 8, which was expected to end on March 31. It then extended the shutdown to April 15.

Honda says the government’s stringent measures to deal with Pakistan’s economic situation have “severely disrupted” the company’s supply chain.

In a notice to the Pakistan Stock Exchange, the company, a unit of Japan’s Honda Motor Co Ltd said:

“As a result, the Company is not in a position to continue with its production and ultimately has continued to shut down its plant from April 16, 2023 to April 30, 2023.”

Other listed automakers in the country, such as Indus Motor Company Limited and Pak Suzuki Motor Company, have also been forced to halt production during the last fiscal year due to Pakistan’s economic difficulties, which have seen central bank foreign exchange reserves drop to a level barely able to cover a month’s imports.

Also on Thursday, Pak Suzuki Motor Company Ltd (PSMC), a unit of Japan’s Suzuki, announced a 13-day extension to an existing halt in its production of motorcycles.

On March 16, it announced an 11-day plant shutdown for its motorcycle plant, citing a shortage of inventory. It later extended the shutdown by 15 days to April 15.

PSMC shut down automobile production for a week from April 7 to April 23 for the same reasons.

-- Pak Suzuki extends motorcycle plant shutdown till April 28 --

Similarly, Pak Suzuki Motor Company (PSMC) also announced that its motorcycle plant will remain shut until April 28.

This decision was made due to the ongoing import restrictions that have affected the auto sector, causing a shortage of inventory.

“Due to shortage of inventory level, the management of the company has decided to extend shutdown period of its motorcycle plant till April 28, 2023,” read a notice to the PSX.