As car sales drop amid rising prices due to the imposition of higher taxes and rupee depreciation, Honda Atlas Cars Pakistan (HACP) has halted production in the country for 10 days, Dawn reported Saturday.

According to reports, HACP shut down its plant for 10 days as its inventories piled up to 2,000 units while Indus Motor Company (IMC), which produces Toyota models in Pakistan, has also decided to stop car production for eight days, two days every week, during this month.

The report quoted HACP and IMC executives as saying that their decision to scale down production during July was informed by plummeting sales in the first 10 days of the month.


“Our inventories from the last month and the first 10 days of July have grown rapidly because of the steep increase in car prices after currency devaluation as well as the imposition of Advance Customs Duty (ACD) on all our imports and Federal Excise Duty (FED) on assembled cars,” an HACP senior executive said.

“It has left us with no option but to shut down the plant to cut production. If the present trend holds, we expect our sales to drop to less than 30,000 units this business year (April 2019-March 2020) from over 48,000 units last year.”

An IMC official also gave the same reasons for “observing eight no-production days” during July. The executive, however, did not give the size of inventory the company has built so far, saying the production cuts could increase next month if sales do not pick up.