Pak Suzuki Motor Company (PSMC) is facing challenges due to inventory shortages and government restrictions on importing raw materials. The company recently announced a temporary shutdown of its automobile and motorcycle plants in Karachi. The automobile plant will be closed from October 30 to November 3, while the motorcycle plant will be shut down from November 1 to November 3.
These shutdowns are a result of ongoing issues with inventory levels, which have been affected by the government’s restrictions on opening Letters of Credit for imports. These restrictions were imposed as the country’s foreign exchange reserves dwindled to a critical level.
In addition to the shutdowns, PSMC has decided to voluntarily delist itself from the Pakistan Stock Exchange (PSX) due to persistent losses and a lack of dividends for shareholders. The company will soon propose a share buyback formula to determine the price for repurchasing shares from the general public.
Despite challenges, PSMC reported a net profit of Rs3.80 billion in the third quarter of 2023, driven by increased car prices and higher sales volumes. However, the company still faces difficulties, as it posted a net loss of Rs5.87 billion in the first nine months of 2023. This is more than double the loss recorded during the same period in the previous year, reflecting the volatility and uncertainties in the automotive industry.