KARACHI: The two most prominent automakers in Pakistan, Honda Atlas Cars and Pak Suzuki Motor Company (PSMC) have temporarily halted production facilities due to a persistent shortage of key raw materials.
The PSMC, in a statement issued by its company secretary on Thursday, “Due to the shortage of inventory levels, the management of the company has decided to shut down the automobile plant from October 25, 2023, to October 27, 2023. However, the motorcycle plant will continue its operations.”
Honda Atlas Cars likewise released a statement in a similar way through its corporate secretary. Their statement said, “The current inventory and parts shortages within the company’s supply chain have severely disrupted operations. As a result, the company cannot continue production and will halt its plant from October 24, 2023, to October 31, 2023.”
The shutdowns initiated by major automotive industry players reflect a more pervasive problem that has been afflicting Pakistan’s automobile sector for over a year. This issue, primarily characterized by a inventory shortage, has set off a recurring pattern of temporary shutdowns throughout the industry.
A notable incident in this regard is the recent decision by Indus Motor Company Limited (IMC) to cease production at its plant for a whole month, exacerbating the ripple effect of these challenges on the supply chain.
IMC’s month-long production halt underscores the extensive and wide-reaching repercussions of these problems on Pakistan’s industrial landscape.
The constant vital raw materials shortage primarily stems from Pakistan’s dwindling foreign exchange reserves. This predicament has given rise to a convoluted process of initiating letters of credit (LCs), impeding the ability to procure critical components.
As a result, the complete supply chain, from automotive manufacturers to their suppliers, faces substantial disruptions, forcing them to suspend production temporarily.
The temporary shutdowns experienced by Honda Atlas Cars and PSMC highlight the imperative to address supply chain challenges for the stability and productivity of Pakistan’s automotive sector.
Following the publication’s findings, the government and stakeholders must collaborate to address the root causes and find lasting solutions.
