Honda halts production in Pakistan, Indus to follow

[B.K.N]

You can't blame tax,they are selling crap as compared to same foreign model at price higher then top tier model.

Government should increase taxes even more
No cars or less cars equals to less pollution less accidents less traffic problems fall in oil imports

 

[Dubious]

You can't blame tax,they are selling crap as compared to same foreign model at price higher then top tier model.

https://twitter.com/x/status/1130402531216187392

https://twitter.com/x/status/1130405823581163520

They are mafia same as media.

https://twitter.com/x/status/1130393846695833600

Hence why I said:

More blackmailers?

 

[Hiraa]

Don't worry we have two wheels.

Its funny we usually Criticized car maker but forget that car has seat belt not only for driver but also for passengers. Most of deadly accident is due to over speeding or reckless driving.
Similarly whole family ride on bike or not using helmet(everyone should wear one), sitting position is also wrong(bike is not design for that) and removing side mirrors.

I am talking about the designs they sell. They are outdated everywhere else and Pakistan gets the old ones as brand new with no accessories with higher prices. Now that you have mentioned the material, yes that is of the cheapest quality as well.

 

[Arsalan]

More blackmailers?

YUP!!

 

[ALi Rizwan]

Increase in taxes caused this fall in demand

Its combination of different factors. Taxes, Devaluation of Pak Rupee and cost for running and maintaining is also getting higher.
This will also results in user moving from bigger too smaller and more fuel efficient cars resulting in decline in demand for bigger one.

 

[Darth Vader]

Crappy Cars, Crappy Safety , Crappy materials
No newer or better models
OVERPRICED
and they complain - Suzuki should be sued for its negligence with mehran.
Better to bring Chinese Companies and push them for bettery safety standard that will kill the market for Toyota, Honda and Suzuki.
Will bring local car companies and push them for higher safety standard from get go no other way around

 

[Mr ambassador]

Do you know why people purchase imported cars ?

When the prices cross quality .

Increasing prices are decreasing quality are due to taxes on taxes.

Who will purchase corrolla in 3 million when they get imported corrolla car with standard quality at 2 million rs

Therefore our car companies compromise on quality due to heavy taxes to save their money.
companies are thinking to stop production line for possible less selling ratio.

It is not black mailing.

 

[airmarshal]

These assemblers are mafias just like politicians. You go to a dealership to buy a particular car, they say go and book it. If I want to get a car immediately, I m asked to give premium. It can range anywhere from 50k to 500k. This means the dealership, the assembler is involved in this illegal business. They deliberately keep the production slow to make extra money.

Just recently, when Suzuki released Alto 660, there was no car in the dealership. You have to book it and wait for 4 months or pay premium for immediate delivery. This is daylight robbery. If you are introducing a new car and it was announced several months ago, where there are no units available for immediate delivery?

To tell you the truth, Honda and Toyota are charging you more than I will pay for same spec car in Canada.

When I see such dishonest practices, I think we deserve Zardari and Nawaz Sharif. We are a dishonest lot of people and that is why we were ruled by worst people for such a long time!

 

[ALi Rizwan]

They need to reduce their profit margins and do more indigenisation. Up to so far they have been bribing the corrupt govts and they never completed their deletion programs. The prices are unnaturally high because they make profits and people have no other choice.
New entrants will enter the market keeping this in mind so they will adjust prices accordingly.

High Profit margin 100% agreed.

But the Real question is do we have enough market for all these upcoming players.
Answer is absolutely no. & in present condition some might not survive for long.

More Companies and more options of same car means less sales of a specific model resulting in smaller order for sub parts.

So on one end we want them to produce more parts locally and on other we introduced so many players that our existing market can't handle them.

 

[S.Y.A]

High Profit margin 100% agreed.

But the Real question is do we have enough market for all these upcoming players.
Answer is absolutely no. & in present condition some might not survive for long.

More Companies and more options of same car means less sales of a specific model resulting in smaller order for sub parts.

So on one end we want them to produce more parts locally and on other we introduced so many players that our existing market can't handle them.

Then they should look towards exporting stuff. enough of this import led growth.

 

[koolio]

These car companies have been ripping off consumers for decades with their substandard quality materials and features, Car companies need to focus on providing better safety features, bring down the exorbitant cost of selling the cars to the customers.

 

[IbnAbdullah]

Salaam

A lot of people seem to have a very strange conception of how businesses work - especially ones that rely on investors. These companies should sell at low profit and run as charities - if that is how we expect businesses to operate than Pakistan isn't getting any investments any time soon.

Mehran went out not because the company grew a conscience and decided people deserved better - rather because competition drove them to make that decision. That is exactly how it works in the west and every where. Cost-benefit analysis is used for decision making not heart and soul most of the decisions profit oriented businesses make.

With regards to increasing enforcing a better standard for products and such, the government has to do it part to ensure that by appropriate legislation and enforcement. However, all of that has to be done whilst keeping the realities of businesses in mind as well - a business is not meant to operate at a loss or a minute profit, rather investors have ROIs and other such measures that they used to decide whether a venture is worth investing in or not.

Last, every time some product is made more expensive or such there are people who come in and say it's all a luxury and screw anyone who partakes in that. Everything they aren't personally used to or affected by, is either disregarded as being useless or a unnecessary. Yes people have to make sacrifices to their living standards for the 'greater good' but that doesn't mean you have to demean the cost of it all for them. It is easy to say that person who sends their child to an expensive school should take him/her out and send them to a less costly one and 'suck it up' but that ignores the reality of the human condition and of living in societies.

It is indeed difficult, socially and otherwise, for people to reduce their standard of living. It is a natural desire for people to want to provide the best for their families and strive to improve their lot in life. That is what motivates people to work hard and increase economic activity. You cannot blame people for wanting it.

Most importantly, it isn't necessarily wrong to ask people to sacrifice some for the benefit of the whole but it should be viewed as a sacrifice. Belittling and demeaning the struggles of people does not help make it easy for them.

It's the same as 'there are kids starving in Africa' can't be used to belittle the feelings and problems of all the other people in the world. It's good to have perspective, but it works both ways. Life is a lot more complicated.

I understand that much of it has to be done and I hope and pray that Allah improves our economic situation soon and people can see an improvement in their lives.

 

[Sugarcane]

How they have piled up inventory when they don't produce single unit without order?

 

[Basel]

Honda halts production in Pakistan, Indus to follow
Nasir JamalUpdated July 13, 2019
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LAHORE: Honda Atlas Cars Pakistan (HACP) shut down its plant for 10 days on Friday as its inventories piled up to 2,000 units on plummeting car sales amid rising prices due to imposition of new, higher taxes in the budget and steep currency devaluation in the recent weeks.

Similarly, Indus Motor Company (IMC), which produces Toyota models in Pakistan, has also decided to stop car production for eight days, two days every week, during this month, company sources told Dawn.

Honda had kept its plant closed for two days earlier last week. However, a Pakistan Suzuki Motor Company spokesman told Dawn the company will take decision whether or not to cut down production in the next few days after analysing sales trend and flow of booking orders during the present month.

HACP and IMC executives, who spoke to Dawn on the condition of anonymity, said their decision to scale down production during July was informed by extremely lacklustre sales in the first 10 days of the current month.

ARTICLE CONTINUES AFTER AD
“Our inventories from the last month and the first 10 days of July have grown rapidly because of steep increase in car prices after currency devaluation as well as imposition of Advance Customs Duty (ACD) on all our imports and Federal Excise Duty (FED) on assembled cars, leaving us with no option but to shut down the plant to cut production. If the present trend holds, we expect our sales to drop to less than 30,000 units this business year (April 2019-March 2020) from over 48,000 units last year,” a senior executive of HACP elaborated.

An IMC official also gave the same reasons for “observing eight no-production days” during July. “It is a very serious situation for the local car manufacturers who are piling up inventories,” he said. But he did not give the size of inventory his company has built so far, saying the production cuts could increase next month if sales do not pick up.

The sales have been on the decrease for the last three months as total car and light commercial vehicles (LCV) volume contracted by 5pc to 17,561 units in June from a year ago. Overall, the car and LCV sales plunged by 7pc during the last fiscal year to 240,335 units from the previous year. The impact of implementation of 5pc ACD on all raw materials and parts used by the local assemblers and imposition of 2.5-7.5pc FED from July 1 has started resulting in further decline in sales.

Industry sources expect a significantly large dip in sales at the end of the year. It may be recalled that the industry was expecting to increase its sales to half a million units by 2022.

Published in Dawn, July 13th, 2019

They have advance orders and the don't deliver on time now crying about low demand, situation is not as bad as they are showing.

 

[Crusher]

Kick these honda, suzuki parasite Japanese companies out of Pakistan, we don't need these greedy b*******, just let other auto companies from rest of the world to replace them, there is no dearth of auto companies in the world which would happily invest in Pakistan if these Japanese parasite auto companies are kicked out. Pakistan has been pampering them for decades and they have turned into spoiled brats.