Pak Suzuki Motor Company (PSMC) has announced that it will observe four non-production days (NPD’s) during January 2020 owing to low demand in the local market.
According to the details, the company has decided to shut down its production plant on every Monday during January 2020. This would also be the first time that Pak Suzuki will be observing non-production days (NPD’s) during a month. The demand for cars in the local market has been on the lower side since the start of the ongoing fiscal year 2019-20. Due to this, the other Japanese auto giants Toyota Indus and Honda Atlas have already been observing non-production days since July 2019. Pak Suzuki, on the other hand, didn’t halt its production for any single day during 2019. However, the company has now joined the club right from the beginning of the New Year.
The start of the year is generally considered as a recovery period for the automakers since the sales remain low towards the end of the year. However, the current situation is completely different from the general trend of sales. The local currency lost significant value against the US dollar last year, thus resulting in a sharp increase in the prices of cars. However, Pakistani Rupee has shown good recovery in the last few months, yet the prices keep going upwards for unknown reasons. The imposition of several additional taxes and duties by the government also contributed to rising prices of cars hence declining the sales in the local market to its record low.
Alto production reduced despite an incredible run:
Surprisingly, according to the vendors, Pak Suzuki has also reduced the production of its hot-selling 660 cc Alto by 25% in January 2020. It is worth mentioning here that Suzuki Alto has been the driving force of the overall sales of the company since its launch in Pakistan back in June 2019. The company has already sold more than 20,000 units of Alto from June-November 2019 and remained the top-seller among all locally manufactured cars during this period. All other models of Pak Suzuki suffered quite badly in the second half of 2019.
Improving times for other automakers:
As far as other Japanese automakers are concerned, both will be working all 30 days during January 2020. However, Toyota Indus will still be operating its plant on a single shift, i.e. 50% of its production capacity. During December 2019, IMC didn’t observe any non-production day, whereas Honda Atlas worked for only eight days and kept its plant closed for the rest of the month. The complete details of plant shutdown for all three automakers since July 2019 are as under:
The above table shows massive improvement for Honda Atlas with the start of the New Year.
Pak Suzuki Car prices increased yet again:
Despite low sales and considerable recovery of Rupee against the US dollar, all three Japanese companies have still raised their car prices in the first week of January 2020. Pak Suzuki raised the prices of its cars by up to PKR 90,000, while Honda Atlas increased the rates of its cars between PKR 20,000 and PKR 100,000. The prices of Toyota Indus cars went up by PKR 20,000. Instead of reducing prices or offering discounts, all the automakers are busy increasing the rates of their products in the local market. Perhaps the companies seem to exploit the advantage of New Year with an expectation of high sales due to the change of the model year. In just a year, the budget cars have gone way beyond the purchasing power of the end consumers. The reduction in production days will not help the companies unless they start to provide benefits to consumers by offering discounts.
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