Honda Atlas Cars (Pakistan) Limited Resumes Plant Operations Amid Improvement in Trade Finance Facilities
Key Highlights :
Honda Atlas Cars (Pakistan) Limited, the assembler of Honda-brand vehicles, announced that it is now preparing to resume plant operations in the coming weeks, amid improvement in trade finance facilities. The automaker shared the development in a notice to the Pakistan Stock Exchange (PSX) on Monday. The company had previously extended its plant shutdown till May 15, 2023 due to the current economic situation in Pakistan.
The current economic situation of Pakistan has made it difficult for the company to continue with its production. The government has resorted to stringent measures, such as restricting opening of LCs for import of CKD kits, raw materials and halting foreign payments, which has disrupted the company’s supply chain. The company has been observing a plant shutdown since March 9, 2023.
However, with the consistent efforts of the company and slight improvement in accessibility of trade finance facilities for the supply chain, the company is now preparing to resume its production in the weeks ahead, with the hope to increase the same gradually. According to latest data released by Pakistan Automotive Manufacturers Association (PAMA), sales of cars, light commercial vehicles, jeeps and vans declined by over 80% year-on-year (YoY) to 4,463 units in April amid growing economic and political uncertainties.
The government is also engaged in trying to revive the stalled Extended Fund Facility (EFF) programme, which if approved by its board would release a funding tranche of over $1 billion. This could provide relief to the auto sector, which has been highly dependent on imports, and has remained engulfed in various crises, with a number of automakers announcing complete or partial shutdowns in recent months.
Honda Atlas Cars (Pakistan) Limited is now looking to make the best of the improved trade finance facilities and gradually increase its production in the coming weeks. This could help the auto sector in the country to get back on its feet and improve the economic situation of Pakistan.
