After Toyota Indus Motor Company Honda Atlas Cars Ltd halted its production of cars. Recently IMC closed its production plant till 30th September IMC has a total of 15 NPDs in this month. On the other side, Honda has 13 working days on August, 20 in July and 11 working days in September 2019.
The company has not mentioned the reason but as we know that the increasing prices of vehicles affect the sale. From the last couple of months, the auto sector of Pakistan faces a loss in the sale of vehicles.
The government banned the import of used vehicles for local dealers to enhance the production of local cars and to increase the sale of local cars. But the high taxes and duties drop the sale. Local car manufacturers said that they pay a high duty on the import of parts to manufacture vehicles because of the devaluation of rupee value.
According to the news, 3000 units have unsold at the Honda plant. The company has laid off almost its 1000 employees in the last three months just because of the drop in the sale. The drop in sale effect the production of units as compared to the sale the expenses are higher.
In this Financial Year 2019, the sales of Honda cars fall by 30% as compared to the previous year. The decline in demand for cars and the high cost of production affect the company position in the market. They have no more orders to produce because they have already more than units that are unsold. In this situation, the company has no reason to produce more units.
This is from our side, the auto industry continuously faces a loss and the demand for cars in the market down because of high rates. The cost of sale is also going to high and the production of vehicles drops as compared to the previous.
What should the government do for the automakers?
Comment your thoughts or suggestion for the automakers.
