Pakistan’s car crisis worsens as Honda, Suzuki, Toyota shut production

Pakistanis currently facing an automotive crisis with three major car companies having shut down production in the last week, according to recent reports. The major automotive brands that have shut down production include Honda Atlas Cars, Pakistan Suzuki and Indus Motor Company, which assembles Toyota vehicles in the neighbouring country. While Honda and Suzuki subsidiaries have announced a ‘temporary’ production halt, Indus Motor has been on a month long production halt since October 17.Statements released by the automakers suggest that the production halts have been induced by a shortage of raw material inventory.

Out of the three car brands, Indus Motor/Toyota has shut production for the longest period of one month. On the other hand, Suzuki halted operations for just two days and Honda cars will not be produced for six days, ending on October 31. Moreover, fresh reports from Pakistani media suggest that manufacturing licenses of three additional car manufacturers have now been suspended after they were unable to achieve their export targets.
Pakistan recently joined the global market for car exports in early October 2023, however, according to Pakistan’s Ministry of Industries and Production, the three unidentified car manufacturers did not meet their export targets and were found in violation of the country’s auto policy. This led to the suspension of their production licenses. Reports suggest that the manufacturers were unable to increase their domestic production and failed to meet the 2 percent export target. At this point, the names of the three carmakers cannot be confirmed.

Apart from the ongoing shortage of raw materials and production halts, the Pakistani automotive industry has been facing a constant crisis due to several reasons since 2022. Factors such as heavy dependence I imports, the government’s decision to curb these imports and depreciation of the Pakistani Rupee have all contributed to the ongoing crisis.