Pak Suzuki Motor Company (PSMC) has once again found itself compelled to halt operations at its production plant. And not surprisingly, the reason behind the unfortunate move is again the ongoing shortage of inventory.
In an official notice to the Pakistan Stock Exchange (PSX), PSMC announced that the automobile plant would be temporarily shut down from November 9, 2023, to November 14, 2023. This marks yet another setback for the local automaker, which has already faced a series of shutdowns throughout the year.
Inventory Woes Continue…
The company has attributed the recurrent shutdowns to a persistent shortage of raw materials. Over the past months, PSMC has announced temporary closures in October, September, August, June, and May. The situation has become a cause for concern for both the company and its investors, highlighting the challenges posed by disruptions in the global supply chain
Interestingly, while the automobile plant experiences a pause in production, PSMC’s motorcycle plant will remain operational. This decision may be a strategic move to manage resources efficiently or to prioritize the production of higher-demand products within the current market conditions.
The Industry Decline
The overall automotive sector in Pakistan has been grappling with various challenges, with a significant impact on PSMC. The government’s decision to curb imports and restrict the issuance of Letters of Credit (LCs) has hit the industry hard. Additionally, higher finance costs and a substantial increase in car prices have contributed to a decline in consumer demand.
In a noteworthy development last month, the Board of Directors (BoD) of PSMC made a significant decision to purchase all outstanding shares of the company and delist from the PSX. The reasoning behind this move was attributed to low valuations and sustained losses, reflecting the broader challenges faced by the company in the current economic climate.
Why do they shut down ? Why didn’t they enhance their capacity building since inception of 40 years or more ? Why still are they assemblers and not exporting vehicles as per conceived idea? What benefit did buyers have in terms of delivery and prices? Why are they selling worlds most expensive cars in Pakistan 🇵🇰 having ALTO dabba @ 3 Million Rs? Lets us shift to imported vehicles and let these plants be shut down permanently as they all have made buyers Mamoon and looted money in Trillions ! One should NOT have any mercy on them and let these factories be Closed as didn’t have any advantage to buyers and Govt. Such interim closures are just a tactic and nothing else. KIA and Hyundai also following suit by the way .