The two biggest automakers in the country, Honda and Toyota are halting production in Pakistan for a few days. Honda Atlas Cars Pakistan (HACP) has shut down its plant for 10 days starting from Friday.
Due to the reduction in car sales because of rising car prices, the automakers are facing a huge loss. Higher taxes in the budget and depreciation of rupee against the dollar compelled automakers to increase prices that have resulted in a decrease in car sales.
Also, Indus Motor Company (IMC) has also made the decision to halt Toyota car production for 8 days, two days every week this month.
Honda closed its plant for two days earlier last week. As for Pakistan Suzuki Motor Company, the company will decide whether to close its plant or not in upcoming days after analyzing the sales trends.
A senior HACP executive said, “Our inventories from the last month and the first 10 days of July have grown rapidly because of steep increase in car prices after currency devaluation as well as imposition of Advance Customs Duty (ACD) on all our imports and Federal Excise Duty (FED) on assembled cars, leaving us with no option but to shut down the plant to cut production. If the present trend holds, we expect our sales to drop to less than 30,000 units this business year (April 2019-March 2020) from over 48,000 units last year.”
An IMC official also said that they will be “observing eight no-production days” during July. “It is a very serious situation for the local car manufacturers who are piling up inventories.”