Honda Atlas Cars (Pakistan) Limited, the assembler of Honda-branded automobiles, has declared that it is ready to resume plant operations in the next weeks, as trade finance facilities improve.
On Monday, the manufacturer informed the Pakistan Stock Exchange (PSX) of the situation.
“With the company’s consistent efforts and a slight improvement in the accessibility of trade finance facilities for the supply chain, the company is now preparing to resume production in the coming weeks, with the hope of gradually increasing the same,” stated the announcement.
Honda Atlas said this month that the plant outage would be extended until May 15, 2023.
“Given Pakistan’s current economic situation, in which the government has resorted to stringent measures such as restricting the opening of LCs for the import of CKD kits, and raw materials, and halting foreign payments, the company’s supply chain has been severely disrupted.”
“As a result, the company is unable to continue production and has ultimately continued to shut down its plant from May 1, 2023, to May 15, 2023,” the company stated at the time.
Since March 9, 2023, the company has been observing a factory shutdown.
According to the most recent data from the Pakistan Automotive Manufacturers Association (PAMA), sales of automobiles, light commercial vehicles, jeeps, and vans fell by more than 80% year on year (YoY) to 4,463 units in April, despite rising economic and political uncertainty.
Pakistan’s auto sector, which is heavily reliant on imports, has been engulfed in a series of crises, with a number of automakers announcing complete or partial shutdowns in recent months, citing a variety of reasons such as decreased market demand and the company’s inability to maintain inventory as they struggle to secure LCs.
Meanwhile, the government is still attempting to persuade the International Monetary Fund (IMF) to resurrect the dormant Extended Fund Facility (EFF) programme, which, if authorized by its board, would release a funding tranche of more than $1 billion.