Thursday, March 09, 2023
By Manoj Kumawat
Honda Cars Shutdown Its Operations In Pakistan
The Japanese carmaker Honda Cars announced to shut down its operations in Pakistan due to the dynamic collapse of economic conditions and disturbance in the supply chain in Pakistan. According to reports, Honda Atlas Cars, the subsidiary of the company in Pakistan has sent a filing to the Pakistan Stock Exchange saying, “ Considering the current economic situation of Pakistan whereby the government resorted to stringent measures including restricting the opening of LCs (letter of credits) for import of CKD (completely knocked-down) kits, raw materials and halting foreign payments, the company's supply chain has also been severely disrupted by such measures”. Moving ahead, the notification also says, that the company is not in a position to continue its operations due to which its production unit will remind closed from March 9, 2023, to March 31, 2023.
It is important to note that the last few months have been disastrous for the economy of Pakistan. The inflation rate has reached its highest-ever level, lowering demand, and a decline in the value of the Pakistani currency are some reasons, why many auto manufacturers are finding it difficult to continue their production activities in the country.
Not only Honda but carmakers like Toyota Motors, and Pakistan Suzuki have also shut down their operation in their plants on multiple occasions due to declining sales. The prices of cars in recent months have hiked at a jet-dynamic speed. The car manufacturers have hiked the prices of their CKD models, thus affecting the buying power of buyers.