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Honda Atlas, Pak Suzuki announce temporary shutdown of production plants

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7 months ago

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  • Pak Suzuki’s motorcycle plant to continue operations.
  • Vehicle plant shutdown to occur on Oct 25-27. 
  • Honda Atlas to shut down from Oct 24-Oct 31. 

KARACHI: Honda Atlas Cars and Pak Suzuki Motor Company (PSMC), the two major auto manufacturers in the country, have announced a temporary shutdown of production plants because of an ongoing shortage of essential raw materials, The News reported on Thursday.

“Due to the shortage of inventory levels, the management of the company has decided to shut down the automobile plant from October 25, 2023, to October 27, 2023. However, the motorcycle plant will continue its operations,” said the PSMC, in a statement issued by its company secretary.

A similar announcement was also made by Honda Atlas Cars through their company secretary.

“The current level of inventory and parts shortages within the company’s supply chain has severely disrupted operations. As a result, the company is unable to continue production and, consequently, will halt its plant from October 24, 2023, to October 31, 2023,” said the statement.

The shutdown by the automotive giants mirrors a broader issue that has been affecting Pakistan’s automobile sector for more than a year. Shortages in inventory levels have driven a cycle of temporary shutdowns across the industry.

Recently, the Indus Motor Company Limited (IMC) made headlines when it announced that it would be closing its production plant for an entire month, extending the impact of these supply chain challenges even further.

IMC’s month-long shutdown emphasises the extensive and far-reaching impact these issues have had on Pakistan’s industrial landscape.

According to The News, the problem is not confined to automobile sector.

A wide range of industries, including auto parts manufacturers, and companies reliant on imported raw materials, have been in a similar predicament. This forces the businesses to resort to periodic shutdowns, further straining the supply chain.

The ongoing shortage of essential raw materials is predominantly attributed to the scarcity of foreign exchange reserves in Pakistan. This challenge has resulted in a difficult process of opening letters of credit (LCs), hampering the ability to import crucial components. 

As a consequence, the entire supply chain, from automobile manufacturers to their suppliers, faces severe disruptions, leaving them with no choice but to temporarily halt production.

Honda Atlas Cars and PSMC’s temporary shutdowns underscore the need to resolve supply chain issues for the stability and productivity of Pakistan’s automotive sector.

As per the publication, the stakeholders, along with the government, will need to work together to address the root causes and establish long-term solutions. 

Analysts are of the view that swift action and cooperative strategies are essential to mitigate these disruptions and pave the way for a robust and resilient automotive industry.

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Pakistan’s gold prices are still declining; see the most recent

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5 days ago

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The price of 10-gram gold reduced by Rs943 to settle at Rs207,733, while the price of gold dropped by Rs1200 to close at Rs242,300 a tola, according to the Sindh Sarafa Jewellers Association.

In the global market, the price of the precious metal fell by $10 to $2,349 per ounce, resulting in losses.

At 04:48 GMT, the spot price of gold had dropped by 0.2% to $2,354.77 per ounce. In the previous session, prices reached a two-week high.

American gold futures dropped 0.6% to $2,361.

Spot silver decreased by 0.4% to $28.03 per ounce, while palladium remained steady at $978.03 and platinum decreased by 0.1% to $992.89.

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Pakistan and the IMF begin talks for a new loan.

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5 days ago

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Pakistan is requesting a $6 to $8 billion bailout package from the international lender over the next three to four years to address its financial troubles.

A mission team led by Nathan Porter, the IMF’s Mission Chief in Pakistan, is meeting with a Pakistani delegation led by Finance Minister Muhammad Aurangzeb.

According to sources familiar with the situation, Islamabad may face more difficult options, such as raising power and gas bills.

Mr. Aurganzeb informed the IMF team that the country’s economy has improved as a result of the IMF loan package, and Islamabad is ready to sign a new loan programme to further develop.

The IMF mission expressed satisfaction with Islamabad’s efforts to revive the country’s struggling economy.

The IMF praised Pakistan’s economic growth in its staff report earlier this week, but warned that the outlook remains challenging, with very high downside risks.

The country nearly avoided collapse last summer, and its $350 billion economy has stabilized since the end of the last IMF program, with inflation falling to roughly 17% in April from a record high of 38% last May.

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Petrol prices are likely to drop significantly beginning May 16.

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5 days ago

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According to sources, the government is set to decrease petrol prices by Rs 14 per litre and diesel prices by Rs 10 on May 16 for the next fortnight’s revision.

Last month, the government reduced the price of fuel and high-speed diesel by Rs5.45 and Rs8.42 per fortnight, respectively.

The current fuel price is Rs288.49 per litre, while the HSD price is Rs281.96.

Meanwhile, oil prices fell further on Monday, as signs of sluggish fuel consumption and comments from U.S. Federal Reserve officials dimmed optimism for interest rate reduction, which may slow growth and reduce fuel demand in the world’s largest economy.

Brent crude prices down 25 cents, or 0.3%, to $82.54 a barrel, while US West Texas Intermediate crude futures fell 19 cents, or 0.2%, to $78.07 per barrel.

Oil prices also declined on signals of poor demand, according to ANZ analysts, as gasoline and distillate inventories in the United States increased in the week before the start of the driving season.

Refiners throughout the world are dealing with falling diesel profitability as new refineries increase supply and warm weather in the northern hemisphere and weak economic activity reduce demand.

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