Problems in the auto sector: Hinopak suspends assembly plant operations – Business and FinanceFGN News
Hinopak Motors Limited (HINO) has become the latest automaker to temporarily shut down operations as it faces the consequences of government import restrictions and struggles to resume production.
Hinopak, which assembles and manufactures Hino buses and trucks, shared the development in a notice to the Pakistan Stock Exchange (PSX) on Tuesday.
“Considering the current economic situation of Pakistan, where commercial banks have been advised by the State Bank of Pakistan (SBP) to prioritize/facilitate imports in essential sectors only, excluding the vehicle. Consequently, the company is facing hurdles in opening LCs for import of CKDs and other raw materials,” read the notice.
“Accordingly, the company is not in a position to continue its production activities and has to temporarily shut down its chassis assembly plant from March 24, 2023 to April 04, 2023,” it added.
Hinopak is a subsidiary of Hino Motors Limited Japan and the parent company is Toyota Motors Corporation Japan.
Pakistan’s auto industry, which is highly dependent on imports, is caught in the middle of a crisis, as the SBP, after the unrelenting depreciation of the rupee, has imposed restrictions on the opening of LCs. Industries are facing constraints in operations as the country’s reserves remain low.
On Monday, Ghandhara Tire and Rubber Company Limited (GTYR), which manufactures and trades tires and tubes for automobiles and motorcycles, said it would temporarily shut down production from March 24 to April 3, citing supply disruptions chains.
Last week, Pak Suzuki Motor Company (PSMC) announced the closure of its motorcycle plant from March 20 to March 31 as it deals with inventory shortages due to import restrictions.
Earlier, Honda Atlas Cars Pakistan Limited announced the longest plant closure to date amid the current economic crisis among the country’s automakers. The company said its plant will close from March 9, 2023, to March 31, 2023.
Pakistan remains in a balance of payments crisis, the head of the country’s central bank has said that import compression will ease after the International Monetary Fund (IMF) review is completed.