Why Honda’s car exports from Pakistan are unlikely to increase soon

KARACHI: Despite a small breakthrough in exporting vehicles to Japan, Honda Atlas Cars (Pakistan) Limited said on Wednesday that large-scale exports remain out of reach due to policy gaps and high production costs that put Pakistan at a disadvantage compared to other Asian markets.

The update came during a corporate briefing held on July 16 with analysts from Arif Habib Limited (AHL), which later shared the key takeaways in a note to clients.

Honda confirmed that it had shipped 38 units of its locally assembled Honda City 1.2L to Japan. However, the company said the lack of government support for auto exports, along with steep input costs, continues to weigh on its ability to compete with other regional operations.

“Discussions with the government are under way, but large-scale exports remain constrained for now,” AHL quoted company officials as saying.

The announcement follows Honda Atlas’s formal entry into the export market earlier this year. In March, the company began exporting completely built units (CBUs), marking a significant step for Pakistan’s struggling auto sector.

Pakistan’s car industry, largely made up of assemblers such as Toyota’s Indus Motors, Honda Atlas, and Pak Suzuki, has traditionally focused on local assembly using imported kits. While some companies have started looking at exports to diversify their operations, results have been limited.

Last year, Indus Motor Company took a similar step by exporting vehicles to other Toyota-affiliated firms overseas.

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Yet despite these efforts, the sector continues to face a raft of challenges, including elevated production costs, supply disruptions and currency volatility, that have made export expansion difficult.

During the same briefing, Honda also unveiled the launch of its HR-V Hybrid on July 14. The company said test drive units are now available across the country and it expects monthly sales to fall between 400 and 500 units.

On the issue of used car imports, Honda said the bulk of such vehicles, nearly 90 per cent, are under 1000cc and therefore do not significantly affect the segment in which the Honda City competes.

The company added that it is waiting for clarity from a potential policy announcement expected in September, which could influence its strategic plans going forward.

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