Pak Suzuki Motor Company has announced that it will extend the shutdown period for its motorcycle manufacturing facility by three days this week in the absence of required parts amid a slowdown in sales and economic crisis in the country.
It, however, clarified that the “automobile plant will remain operative,” according to a notification sent to the Pakistan Stock Exchange (PSX) on Tuesday.
“Due to shortage of inventory, the management of the company has decided to shut down the motorcycle plant from September 20, 2023 to September 22, 2023,” it said.
The company did not elaborate which kind of inventory was short and why. Whether the inventory crisis was due to the unavailability of raw material from local sources or it was owing to controlled imports?
It was the sixth such notice from the company in the past five months (May to September 2023), suggesting that the plant resumes production at regular intervals.
The company said in its latest half-yearly report for the period ended June 30, 2023 that the organised market (Pama member companies) for motorcycles and three-wheelers decreased by 37% from 883,530 units in the first half of 2022 to 559,134 units in the current period.
During the half year, the company sold 8,509 units as compared to sales of 19,870 units in the corresponding period of 2022, posting a decline of 57%.
Earlier, it observed non-production days for its four-wheeler plant as well due to import restrictions in the wake of thin foreign exchange reserves.
Though the government removed all import restrictions in June 2023, the relatively low inflow of foreign currencies has not allowed authorities to practically implement the decision of reopening imports on a full scale.
The company said in the half-yearly report that economic activity was expected to recover in financial year 2024 on the back of a rebound in agricultural output and the easing of import restrictions, with likely improvement in manufacturing and construction activity.
“However, macroeconomic indicators are still challenging for the auto industry as higher prices and a decline in car financing due to high interest rates may impact the demand for vehicles.”
Published in The Express Tribune, September 20th, 2023.
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