Pakistan’s current economic mess looks never-ending soon. Twists and turns come faster than any mystery novel. And the recent slump in the Rupee value has taken the fuss to new levels.
Meanwhile, the country’s import-dependent auto industry is observing a continuous downtrend. Car makers are at pains to run their assembling plants. Even the famous ‘BIG 3’ named Honda Atlas has a record of dwindling sales, low production, and hefty losses.
In a notification, the company has resumed the production shutdown till May 15. The reason is not new – the same import curbs inflicted by the State Bank of Pakistan (SBP) led to zero inventory and a ceasing supply chain.
The production-shutdown episode is incepted from March 9 till 31st. In the next notification, Honda Atlas Cars Limited(HACL) extended the production from April 1 to 15. And then, the new circular stated that the episode would be continued from April 16 to 30.
The Recent communication informed that the Shut down would remain intact from May 1 till 15. Meaning by the end of this shutdown, it will be 2 months since the closure of the company’s production. This development will further aggravate the sales and production charts.
The Decline
It bears mention that as per Pakistan Automotive Manufacturers Association (PAMA) report, Honda Atlas’ sales decreased by 49% in March, selling 835 units compared to 1,636 units in February. (MoM decline: 49%). The carmaker sold 611 units of City and Civic and 224 units of BR-V and HR-V.
Mind you, the financial situation of PSMC is not looking good either. The company has announced a loss after tax (LAT) of Rs. 12.91 billion in the first quarter that ended on March 31, 2023, which is the highest-ever reported loss for the company. The loss is attributed to the high finance cost, which includes exchange loss, the markup on late delivery, and demurrage and detention charges, and was up 12x year on year and 3x quarter on quarter to Rs. 12.8 billion.
what do you think about Honda’s recent shutdown? Drop your thoughts in the comment section.
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