Pak Suzuki Motor Company Limited has released a statement on Wednesday, announcing that it will continue the shutdown of its plant until May 9th, 2023.
This decision comes after the company has faced a serious shortage of raw materials, leading to halted production for several months. Shareholders were informed of this decision through the Pakistan Stock Exchange (PSX).
Pak Suzuki had previously issued a notice to shut down its plant from April 12th, 2023, to April 28th, 2023. The government of Pakistan had imposed a ban in May 2022, resulting in a shortage of raw materials for automobile companies in the country. This has made it difficult for these companies to open Letters of Credit (LCs) to import motor vehicle kits.
While the State Bank of Pakistan (SBP) recently lifted the prior permission condition for commercial banks to open LCs for import proceeds, the industry is still struggling to acquire the necessary raw materials. Some insiders suggest that banks may be running low on foreign currency, making it challenging to open LCs. Others remain hopeful that the eased conditions will ultimately lead to the release of raw material imports.
Pak Suzuki reported a record loss of Rs13 billion in the first quarter, ending on March 31st, 2023. This joint venture between Pakistan Automobile Corporation Limited and Suzuki Motor Corporation Japan submitted its financial results to the Pakistan Stock Market (PSX). The Rs13 billion loss after tax is a significant increase from the Rs460 million loss reported during the same period last year. The loss per share for the quarter ending on March 31st, 2023 was Rs156.94 compared to the Rs5.59 loss per share in the same period last year.
The board of directors of Pak Suzuki Motor Co. Limited approved the unaudited condensed interim financial information for the first quarter of 2023. The company’s report stated that the government was striving to maintain forex reserves and stability in exchange rates through fiscal consolidation. Although this may impact growth prospects in the short term, it may contribute to stability in the long run by expanding production capacities and productivity. The report also emphasized that long-term consistent policies are vital for the growth of the auto industry.
The auto industry in Pakistan has been adversely affected by challenging macroeconomic indicators in the country. It provides import substitution for local consumption, develops the engineering base in the country, and contributes significantly to the national exchequer through payments for duties and taxes. The industry expects relaxation on taxes and import restrictions with support from the government to play its role in the economic development of the country.
Pak Suzuki announces massive Rs13 billion loss in Q1 of 2023
