Pakistan leading Motor Company HinoPak which assembles and manufactures Hino buses and trucks halted its production due to the country’s worst economic conditions.
In a recent notification, Hinopak Motors Limited informed the Pakistan Stock Exchange (PSX) that it will shut down its manufacturing plant for 12 days. The shutdown will continue from 24th March to 4th April 2023.
“Considering the current economic situation of Pakistan, whereby the commercial banks have been advised by the State Bank of Pakistan (SBP) to prioritize/facilitate the imports to essential sectors only, which does not include the auto sector. Consequently, the company has been facing hurdles in opening of LCs for the import of CKDs and other raw materials,” read the notice.
Hinopak is a subsidiary of Hino Motors Limited Japan and the ultimate parent company is Toyota Motors Corporation Japan.
Pakistan’s auto industry, which is heavily dependent on imports, is in a precarious position due to the SBP imposed limitations on the opening of LCs amid the country’s dwindling forex reserves.
Earlier this month famous Automobile maker Honda Atlas Cars (Pakistan) Limited (HCAR) temporarily shut down its production plant from 9th to 31st March 2023, citing supply chain disruptions.
The company announced its decision in a notice to the Pakistan Stock Exchange (PSX) and the current economic situation. The Auto industry barely survives in the country as Economical crisis worsens in Pakistan.
Remember that Rupee has fallen, inflation has reached high levels for decades and Pakistan’s economy has collapsed alongside a political crisis. However, devastating floods and a global energy crisis have added additional stress and harmed the country’s economy.
A shortage of imported parts and materials forces automotive and other industries to shut down their operations. Due to a shortage of foreign reserves, thousands of containers containing essential food items, raw materials, and medical supplies have been held up at the Karachi port.
Banks are refusing to issue new letters of credit to importers because they don’t have enough dollars.