Overview
Suzuki Pakistan announced another round of plant shutdown. Pak Suzuki bikes and cars plant will shutdown for May 2023. The continued announcement of plant shutdown confirms the company has facing hard times and non-productive days. Suzuki announced the shutdown of its production plant from 2nd May to 9 May 2023.
Overall, the Pakistan automotive industry survives for major bad reasons. This also causes huge losses. In the early report, Pak Suzuki Motors mentioned a loss after tax (LAT) of Rs. 12.91 billion in the first quarter of the year 2023 which is end on 31 March 2023. It’s pertinent to mention that this is not the first but the company has faced intermittent production shutdowns from last year.
Reason For Suzuki Shutdown
There is no reason cited by the Company. But the current situation is not hidden from all of us. The delay in deliveries causes many hurdles for the company. One of the major reasons is the non-availability of stock. The delay in LCs approval by SBP has made it difficult for automakers to continue the smooth production process.
Companies announced plant shutdowns when they have nothing to do with the production. This same situation is around in the automotive industry right now and they announce back-to-back plant shutdowns.
Pak Suzuki bikes and cars are very popular in the country. The company is bearing a huge loss at this time. No production of bikes is a serious trouble because majority of public buy Suzuki motorbikes.
Pak Suzuki Loss Report
As we have mentioned above the first quarter loss of this year is Rs. 12.91 billion. Pak Suzuki faced a loss of Rs. 460 million last year in the same time period. As compared to last year’s first quarter this time company has beard enough huge loss.
As per the Pak Suzuki report the net sale is decreased by 54%. On the YoY basis, Suzuki faced an Rs. 21.8 billion loss compared to the previous year’s Rs 47.7 billion loss.
If the economic situation will continue the loss for companies will increase hugely. The non-availability of CKD kits creates troubles in production and the company fails to provide deliveries on time.
Conclusion
Due to the non-availability of stock, several car makers announce plant shutdowns. The unstable economic situation almost destroys the automotive industry. The import restriction and heavy customs made car prices hugely high for customers. at this time automakers really need the support of the government to continue operations. Non-availability of CKD kits stopped the production of vehicles at the plants.
