ISLAMABAD: Honda Atlas Cars on Friday announced a fifteen-day extension to its most prolonged plant shutdown in 2023, citing the country’s economic meltdown, halting foreign payments, and restrictions on opening letters of credit for imports.
The company announced an initial twenty-three-day shutdown on March 8, expected to end on March 31. The company then extended the shutdown to April 15, which was later extended till April 30.
In its fourth plant closure announcement in 2023, the assembler of Honda automobiles in the country said that it would extend shutdown for the next 15 days till May 15.
Honda said the government’s stringent steps to deal with Pakistan’s economic crisis have “severely disrupted” its supply chain.
Honda Atlas’s notice
In a letter to the Pakistan Stock Exchange (PSE), the company, a unit of Japan’s Honda Motor Co Ltd, said: as a result, the plant is not in a position to continue with its production, and it has continued the shut down from May 1, 2023, to May 15 2023.
Pakistan is facing its worst financial crisis. On one side, the country is standing with only 4.46 billion dollars (as of April 20, 2023) reserves in its central bank, while it also struggles to get an International Monetary Fund (IMF) agreement done amid a lack of foreign inflows.
With alarmingly low levels of foreign reserves and a shortage of dollars, banks reportedly deny opening letters of credit for items that are not considered essential”.
Pakistan’s economic challenges have hit the auto industry dependent on imports, as many companies have been shut down continuously, blaming inventory shortages.
