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Pak Suzuki Extends Shutdown of Automobile and Motorcycle Plants

Pak Suzuki Extends Shutdown of Automobile and Motorcycle Plants

Pak Suzuki Extends Shutdown of Automobile and Motorcycle Plants

Pak Suzuki Extends Shutdown of Automobile and Motorcycle Plants

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  • Pak Suzuki extends closure of automobile and motorcycle plants until July 19 due to inventory shortage.
  • PSMC recorded its highest-ever quarterly loss of Rs12.9 billion in the first three months of 2023.
  • Pakistan’s auto sector faces challenges including import restrictions and limitations on Letters of Credit (LC).
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Pak Suzuki Motor Company (PSMC) has decided to extend the closure of its automobile and motorcycle plants until July 19, as per an announcement made in a notice to the Pakistan Stock Exchange (PSX) on Friday. The company cited a shortage of inventory as the reason behind this decision. The previous closure had been planned until July 15. Additionally, PSMC had temporarily shut down both plants from May 2 to May 9 due to a lack of raw materials.

PSMC is a renowned assembler, manufacturer, and marketer of Suzuki vehicles, including cars, pickups, vans, 4x4s, motorcycles, and related spare parts. The Suzuki brand itself originates from Japan. However, the company has faced significant challenges recently, including recording its highest-ever quarterly loss of Rs12.9 billion in the first three months of 2023. This substantial loss was primarily attributed to declining sales and high finance costs. In the same period last year, PSMC had reported a loss of Rs460.227 million.

The automobile sector in Pakistan has been grappling with multiple crises. Indus Motor Company Limited and Honda Atlas Cars, among other listed companies, have also had to suspend production in recent months due to economic difficulties. The country’s auto sector heavily relies on imports, and it has been severely impacted by import restrictions and limitations on the issuance of Letters of Credit (LC).

In an effort to support the industrial sector, the central bank announced the withdrawal of all restrictions on imports last month. Previously, in December of the previous year, the State Bank of Pakistan (SBP) had instructed banks to prioritize and facilitate imports related to essential items, energy, agricultural inputs, exports-oriented industries, and deferred payment imports.

The extension of the plant closure by PSMC indicates the ongoing challenges faced by the automotive industry in Pakistan. The company’s decision to extend the shutdown until July 19 is aimed at addressing the shortage of inventory that has affected its operations. With import restrictions being lifted and the facilitation of imports by the central bank, the industry hopes for some relief and recovery in the near future.

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