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Pakistan's Honda Atlas shuts production to end-March on import difficulties

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2 minute readMarch 8, 202310:16 AM CSTLast Updated 3 hours ago

Pakistan's Honda Atlas shuts production to end-March on import difficulties​

By Ariba Shahid
The Honda logo is displayed at the 89th Geneva International Motor Show

The Honda logo is displayed at the 89th Geneva International Motor Show in Geneva, Switzerland, March 5, 2019. REUTERS/Pierre Albouy
KARACHI, Pakistan, March 8 (Reuters) - Honda Atlas Cars Pakistan Ltd has announced the longest plant shutdown to date in the current economic crisis amongst the country's automakers, which are struggling to obtain raw materials due to import difficulties.
The company, a unit of Japanese car giant Honda Motor Co Ltd (7267.T), said its plant would shut from March 9, 2023, to March 31, 2023.
“The company is not in a position to continue with its production,” it said in a notice to the Pakistan Stock Exchange (PSX), explaining its supply chain had been "severely disrupted."


Other listed-automakers, such as Indus Motor Company Limited (INDU) and Pak Suzuki Motor Company (PSMC), have also been forced to halt production during the past three quarters due to Pakistan's economic difficulties, which have seen central bank foreign exchange reserves drop to a level barely able to cover four weeks of imports.
As a result, letters of credit (LC), used for imports, are facing delays while being processed and priority is being given to essential items such as food and medicine.

Pakistan is currently in talks with the International Monetary Fund (IMF) to unlock the next tranche of $1.1 billion of a $6.5 billion bailout agreed in 2019.
“It is worrying because shutdowns not just impact corporate profitability but unemployment as well. The longer these shutdowns continue, it would test the companies' ability to maintain staff strength," says Fahad Rauf, head of research at Ismail Iqbal Securities, a local brokerage firm.

Rauf adds that the situation is not likely to improve any time soon for low priority sectors, such as automobiles, in light of LC constraints.
“Pakistan has limited dollars and until reserves improve to at least two months’ worth of import cover, import restrictions would likely continue.”
Other manufacturing halts in the sector have been between two and 16 days.
 
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Well its not really Honda its Atlas, who adds NO value but takes rent based on market access. Plus if they were any good they would be exporting, not importing this junk. Atlas should have been like Tata by now, buying Honda itself or other companies and be an international brand.
Survival of the fittest. You depend on govt protections, when that govt fails u fail.
 
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Don't worry govt will arrest Imran Khan, Rana badmash will have a press conference, Maryam will go on the usual nonsense tirade, the law minister will rewrite the law, our COAS will quote some Quranic verses in an economic meeting, the same will be then retweeted by our finance minister, and all will be well.
 
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Don’t worry noonies have plenty of donkeys to use as transport
 
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It's not just Honda, every sector is gone. Talk about textile they are the ones bringing foreign reserves, IT industry all gone thanks to this imported government and it's supporters and handlers aka the establishment.
"Thanking for Fucking Pakistan up royally"
 
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good. hope the import based automotive sector is wiped out and replaced by companies that produce locally and export. the downfall of the assembler mafia is the only good thing to come out of this fiasco.
 
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