Honda Atlas extends longest shutdown

Honda Atlas Cars Pakistan Ltd has extended its plant shutdown by 15 days, making it the longest shutdown for this fiscal year. The company cited several factors, including the economic crisis in the country and the government’s strict measures to address it.

The shutdown was initially planned for 23 days from March 8 to March 31, but the company has now extended it until April 15. The company explained that the government’s stringent measures have severely impacted its supply chain, making it unable to continue production.

“The auto industry in Pakistan has been pushed to the brink of collapse due to the ongoing economic crisis,” said Sabir Shaikh, an auto market expert, adding that, “Multinational companies have been hit hard by the devaluation of the dollar and issues related to the local currency, prompting them to announce plant shutdowns and expansions.”

Honda Atlas Cars is not the only company that has announced a plant shutdown. Pak Suzuki Motor Company Limited also declared that its motorcycle production plant will remain shut for an additional 24 days until April 28. The multinational company had initially announced the plant closure until April 4 but has now extended the deadline due to a shortage of inventory levels.

The situation highlights the severity of the economic crisis and its impact on the auto industry in the country. Multinational auto companies have already shifted from double-shift to single-shift production, followed by temporary plant shutdowns. Now, they have initiated a series of complete plant shutdowns for a set period of time.

The government needs to take immediate measures to address the economic crisis and provide relief to the auto industry. The industry contributes significantly to the country’s economy and employs thousands of people, but restricting the opening of Letters of Credit (LCs) for the import of CKD kits, raw materials and halting foreign payments are all measures derailing the industry. The prolonged plant shutdowns can lead to job losses and have a ripple effect on other industries that are dependent on the auto sector.

Published in The Express Tribune, April 14^th, 2023.

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