Hinopak Motors, Ghandhara Tyre & Rubber announce plant shutdowns

Both companies set to be closed for last week of March with production recommencing in first week of April 

LAHORE: In separate notifications to the Pakistan Stock Exchange, Ghandhara Tyre & Rubber Company and Hinopak Motors have non-production days (NPD). Ghandhara will observe the NDPs from March 24 to April 3, whilst Hinopak will observe NPDs from March 24 to April 4. 

Both companies have attributed their decision to their inability to import the requisite raw material needed to maintain their production levels. 

Why can they not import the requisite raw materials? 

The State Bank of Pakistan (SBP) announced EPD Circular Letter No. 20 of 2022 on December 22, 2022, as a substitution to its governance over the import of products under Chapters 84, 85, and certain items of Chapter 87. This new system empowered authorised dealers (banks) to validate all transactions for these imports, providing some solace to the ailing automotive industry that had been gravely impacted by the prior mechanism. 

Authorised dealers were, however,  instructed to prioritise essential imports over those aligned with conspicuous consumption, prompting concerns about the depth of relief the automotive industry would receive in the immediate future. Firms that were able to obtain raw materials from their foreign suppliers on usance letters of credit, or were able to meet their payment obligations outside of Pakistan were to also be given preference. The circular, however, explicitly created a hierarchy of imports which evidently has not benefited Ghandhara Nissan, and Hinopak. 

Another ones bites the dust

Ghandhara’s and Hinopak’s decision comes the week after Suzuki decided to halt motorcycle production for the remainder of March for the very same reasons. Previously Honda had announced to observe the industry’s longest spell of NPDs amidst the current crises from from March 9 to March 31. Ghandhara’s sister company Ghandhara Nissan has also observed NPDs from March 6 to March 10, with the decision to shift to a bi-weekly production schedule for the remainder of March. Agriauto Industries also announced a partial shutdown for the entirety of March last week, whilst Sazgar announced its first ever plant closure for its four wheel division from February 27 to March 4. 

Going further back this year, Ghandhara Tyre itself observed NPDs from February 13 to February 17. Suzuki, in contrast has announced plant closures previously  from January 2 to January 6, from January 9 to January 13, from January 16 to January 20, and from February 13 to February 21. Toyota too observed plant closures from February 1 to February 14 with the decision to shift to a single shift upon the resumption of regular production from February 15. Finally, Millat Tractors also observed a plant closure from  January 6 January 15.

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Daniyal Ahmad
Daniyal Ahmad
The author is a member of the staff, and covers the automobile, energy and advertising insdusties as a sector analyst. He can be reached at [email protected]


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