Pak Suzuki Motor Company Limited has revealed its financial results for the first half of 2019, which ended on 30th June 2019, and it discloses a loss of Rs.1.5 billion to the company.
One of the leading auto manufacturers in the country, Pak Suzuki, is somehow least affected by the current economic slowdown process, but still, the stats suggest a decline in profits of the company. The Japanese auto giant gained a profit of Rs.1.29 billion in the same period during 2018. The overall sales of Pak Suzuki in this tenure have jumped 4.86% to Rs.65.42 billion as compared to Rs.62.39 billion in the previous year. Despite a drop of 11.26% in the volumes, the reason behind this particular increase in net sales is mainly due to the high amount of percentage hike in the prices of cars during the last six months or so.
At the moment, the playing field for all the auto manufacturers is getting tough due to the high costs of production owing to the duties and taxes levied by the government in the recent past. The depreciation of rupee against the US dollar is also doing no good to the auto industry as the cost of raw material is rising insanely. The government has also played its part in worsening the situation by imposing 5% advance customs duty (ACD) on the import of raw material. The Federal Excise Duty (FED) has now long been criticized by the market insiders since they believe the auto sector cannot bear the additional duties. The cost of sales for Pak Suzuki also increased by 10.32% to Rs.64.05 billion from the previous Rs.58.06 billion, which has played a handy role in bringing down the gross profit margin. The profits of the company declined by a whopping 68.58% to just Rs.1.37 billion in comparison to Rs.4.36 billion during the first half of 2018. The auto manufacturer’s car sales volume description for each model is mentioned in the table below.
The above stats indicate that the company went through a total decrease of 11.25% in sales volumes during the first half of 2019 as compared to the same period last year. However, one of the main reasons for this decline is also the discontinuation of the iconic Mehran, which previously contributed to the sales volume to a great extent. The all-new 660cc Alto has now replaced it with a high expectation of filling the big shoes of Mehran as far as Pak Suzuki is concerned. The company has already sold 1685 units of Alto in no time what so ever. Apart from that, Suzuki Swift has faced the major hit as its sales went down by 23.74%, followed by Bolan and Ravi with 15.61% and 12.44% respectively. On the other hand, Wagon R remains the backbone of the automaker in terms of sales as it went up by 8.87% despite all the issues faced by the auto industry. Cultus has also started to gain confidence in the consumers as its sales went up by 8.53% during the first half of 2019.
Due to an increase in the interest rates, the finance cost of the automaker also went up from Rs.92.86 million to Rs.706.42 million. It has also been reported that a loss of Rs.18.53 per share was suffered by Pak Suzuki in comparison to earnings per share of Rs.15.77. However, the company got a benefit of the tax reversal of Rs.600 million.
PakWheels always focuses on raising the voice of the consumers of the auto sector and the new taxes and duties levied by the government is literally unjust and should be withdrawn as soon as possible. What are your thoughts regarding the story? Let us know in the comments space and stay connected for more statistical updates related to the automobile industry.