Due to supply chain disruptions caused by the Pakistani government’s stringent measures on Imports, Honda Atlas Cars (Pakistan) Limited (HCAR) has decided to temporarily shut down its plant from March 9 to 31, according to a notice issued to the Pakistan Stock Exchange (PSX) on Wednesday.
The notice stated that the company’s supply chain has been severely disrupted by the government’s restrictions on Letters of Credit (LCs) restrictions for importing CKD kits and raw materials, as well as halting foreign payments, and as a result, the company is unable to continue production and has to shut down its plant temporarily.
Pakistan’s auto sector has been facing various crises, and several automakers have announced complete or partial shutdowns in recent months due to reduced demand in the market and the company’s inability to maintain inventory as they struggle to secure LCs.
Ghandhara Nissan Limited (GHNL) had previously decided to shut down its plant from March 6 to 10 due to import and clearance issues with their consignments from commercial banks.
Pakistan is currently facing a massive Balance of Payment crisis, where External Inflows have decreased while government is trying to control External Outflows.
Central bank’s foreign exchange reserves standing at just over $3.8 billion, are barely enough for a month of essential imports.
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