Honda & Suzuki’s Production Shutdown
Honda and Suzuki are both major Japanese automakers with
manufacturing facilities in many countries all over the world. It is common for
automotive companies to shut down production for different reasons which
include restructuring the models, trying to achieve product-market fit, and
identifying the problem with their supply chain, etc.
A few days ago, the country's leading automakers Honda Atlas
and Pakistan Suzuki also closed their manufacturing plants. Amid a letter of
credit (LC) and a volatile economy, Honda Atlas has decided to extend the
closure of its manufacturing plant for another 15 days.
"We were unable to continue the production and from 1
April 2023 he permanently closed the facility until 15 April 2022," the
company said in a letter to the Pakistan Stock Exchange...
Meanwhile, Pak Suzuki Motor Company has also announced that
it will extend the closure of its motorcycle factory until April 15. In
addition, from April 7, 2023, he will stop producing cars until April 14, 2023.
PSMC said: "Due to inventory shortages, company management has decided to
extend the closing time of the motorcycle factory until April 15, 2020."
he will be closed on April 14, 2023. "
Furthermore, the automotive companies can be influenced to a
great extent by shutting down production which can cause delays in the delivery
of vehicles, lack of resources, scarcity of famous models, and other
instabilities. The shutdown may be due to a number of reasons which include,
interruptions in the supply chain process, problems among the laborers, or
alterations in the demand. The duration and intensity of the shutdown rely upon
its root cause and the capability of the manufacturer to mitigate the impact of
the problems. A production shutdown may last for days, weeks, months, or even
longer in some cases. However, having preparedness strategies ready is not
something unusual for the automakers to identify such problems and mitigate
their impact on the consumers as well as the operations of the company.
A shutdown of Honda and Suzuki’s production could have a
significant impact on the country's economy and employment rates. The
automotive industry is considered to be an essential sector for the economy of
Pakistan and one of the major manufacturing sectors of the country. Remarkable
contributions to the country’s GDP are made by these companies which leads to
employing a significant number of people. Other industries and businesses in
the supply chain can be affected as a result of shutting down production such
as the raw material supplier and other companies that depend on the goods and
services being transported. Consequently, the economic activity, output, and
exports of the country would be decreased, which eventually leads to stagnation
in the overall economy. Governments may need to take steps to support the
industry and aid recovery, including B. Stimulate investment, cut taxes, and
ease regulation.
Pakistan's ongoing recession is making it very difficult for
auto companies to continue producing and supplying the Pakistani market. During
these crises, it has become quite difficult for Pakistani customers to be able
to afford these cars at the current price.
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