Pak Suzuki Motor Company Limited (PSMC) has announced the temporary closure of its automobile and motorcycle assembly factory from May 2 to May 9, 2023. The announcement was made in a formal notification to the Pakistan Stock Exchange (PSX), citing a shortage of stock as the reason for the closure.
In Q1, 2023, which ended on March 31st, PSMC reported its highest-ever loss after tax (LAT) of Rs. 12.91 billion. This marks a significant increase from the loss of Rs. 460 million reported in the same period of the previous year. The increase in loss was primarily due to higher-than-anticipated financial charges, including exchange loss, markup for late delivery, and demurrage and detention fees, which totaled Rs. 12.8 billion.
Despite recent price increases and production slowdowns, PSMC’s net sales fell by 54 percent YoY, declining from Rs. 47.7 billion last year to Rs. 21.8 billion. The majority of automakers have attributed the decline to the State Bank of Pakistan’s reluctance to approve letters of credit (LCs) for the clearance of imported goods, leading to production shutdowns across the industry.
The closure of PSMC’s assembly factory is likely to impact the company’s sales and revenue, along with the wider automotive industry in Pakistan. With the demand for automobiles and motorcycles on the rise, the industry faces significant challenges that require immediate attention from the government and regulators to ensure its sustainability.
