ISLAMABAD: Two major automakers, Honda Atlas Cars (Pakistan) Limited and Pak Suzuki Motor Company Limited, stated on Thursday that they would further extend their plant shutdowns due to ongoing political and economic turmoil in the country.
Most automobile companies, including Honda and Suzuki, have complained about inventory shortages and import restrictions for the last few months.
However, some economic experts say these are just tactics of the automobile mafia to keep pressure on the government as they have increased prices numerous times during the last couple of years, including some abrupt, unexpected, and unjust price changes.
In a statement official from Honda Atlas said the company was not in a situation to have further production and was therefore decided to shut its plant for 15 days from April 16 to 30.
Earlier, Honda Atlas shut down its plant on March 8 till March 31. However, it was extended till April 15.
In another notice, Pak Suzuki said that they were also going to extend its motorcycle plant shutdown till April 28 due to a shortage of inventories. The company also announced that the automobile plant would stop production on April 7 and 14 due to low inventories.
As Pakistan has a critically alarming level of foreign exchange reserves, banks reportedly deny opening LCs for items that are not “urgent or essential.”
Shut Down by Pak Suzuki and Toyota Motors
Pakistan Suzuki and Toyota Motors, among several other four- and two-wheel makers, have shut down their plants in the recent past, which has affected their sales. But again, the economists and customers say these shutdowns were nothing but to blackmail the government and customers. Meanwhile, the companies have also raised the prices of their CKD models, which has deeply affected people’s already low purchasing power.
The country lacks much-needed dollars to meet import and other external payment commitments. The central bank’s foreign exchange reserves are about $4.03 billion, hardly enough for a month of essential imports.
Meanwhile, the government is trying to finalize an agreement with the IMF (International Monetary Fund) to revive the stalled Extended Fund Facility (EFF) programme, which, if approved by the IMF, would release a funding tranche of $1.1 billion.
