Honda Atlas Shuts Down the Factory Now in Pakistan
Latest Update – Due to supply chain disruption, Honda Atlas Shuts Down temporarily their factory from November 1 to November 7, 2023. Previously, the factory was closed from October 24, 2023 to October 31, 2023.
Honda Atlas Shuts Down (Previous update):
The LC problem is still plaguing the Pakistani automobile industry. After Suzuki extended its factory shutdown, Honda also extended its production shutdown. Reasons for this recent shut down are inventory shortages and supply chain disruptions.
In the latest development, Honda has extended its factory shutdown to the 15th. But the company has halted production several times this year. Here is the latest history of Honda factory closings.
- From March 9 to March 31
- April 1 to April 15
- April 16 to April 30
- May 1st to May 15th (Latest)
Honda car sales have declined compared to the previous year due to frequent price hikes. These interruptions will adversely affect the company’s sales.
As the issue of non-opening of LCs continues, companies find it difficult to import spare parts and raw materials to assemble vehicles. But it is important to note that this company has been operating in Pakistan for a long time. If they have localized most of their production (not assembling), the import ban will have little effect on it.
LC / Letter of Credit Issue in Pakistan
The State Bank of Pakistan (SBP) last year introduced a new policy of “advance import approval” due to the deteriorating economic situation and shortage of US dollars in the country. Therefore, companies and entrepreneurs cannot directly obtain LCs from banks without prior permission and approval.
Most people will have no problem with this. But the problem arises when the approval is delayed. According to some media outlets, businesses are having trouble getting approval due to lack of dollars. As a result, many businesses cannot import goods (raw materials, equipment, etc.) that disrupt their supply chain. As a result, many were forced to close their operations temporarily.
LC or letter of credit bank guarantee. Banks guarantee payment for goods or services (when imported) as long as certain conditions are met. It is used in international trade to secure payment between buyers and sellers.
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Also check: Honda Car Prices Decreased Now Up to Rs.300,000 in Pakistan