Pak Suzuki suspends motorcycle bookings amid supply chain constraints

Pak Suzuki Motor Company (PSMC) on Thursday announced suspension of bookings of its motorcycles for an indefinite period citing “import based supply chain constraints and uncertain production possibilities”. The company will stop taking orders from Friday.

In a letter to its dealers, the company said that under the present economic circumstances, import-based supply chain constraints and uncertain production possibilities, it is unable to serve new customers.

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“We will, therefore, stop bookings of our motorcycle products from January 20, 2023 for the time being. However, bookings will resume as the situation becomes favourable to serve fresh customers,” the letter read.

Just like many other import-based sectors, Pakistan’s auto industry is also reeling from shortage of foreign auto parts and raw material. The industries are facing hindrances in operations as the country’s reserves have depleted to a critical level.

As per latest SBP data, foreign exchange reserves held by the central bank are hovering at the $4.6-billion mark.

The low level of reserves led SBP to place restrictions on imports earlier this year, much to the dismay of several importers and businesses in Pakistan that cited these curbs as the reason behind shutting down or scaling back operations.

Pak Suzuki extends plant shutdown to January 13

Chairman Association of Pakistan Motorcycle Assemblers (APMA) Sabir Sheikh told Business Recorder that motorcycles of Japanese brands such as Suzuki, Honda and Yamaha are in demand despite uncertain economic conditions.

“Premium brands such as Suzuki are in demand because many people are now moving from cars to two-wheelers in a bid to reduce their cost of traveling amid high fuel prices,” Sheikh said.

Sheikh added that the sales of Chinese motorcycles have also been falling as its buyers are affected by the country’s economic conditions.

Sheikh expected the price of bikes to rise when the booking resume since the ongoing volatility in exchange rates and LC crisis are adding to production cost of the companies.

“They don’t know when they can open LCs and at what rate,” he said.

Meanwhile, the sector is already facing temporary shutdowns by major players.

Among major companies, Pak Suzuki, Indus Motor Company (Toyota) and Baluchistan Wheels Limited (BWHL) announced shutdown of operations.

“Automobile demand was already very low as banks were not opening the letters of credit (LCs) which dented bookings,” Arsalan Siddiqui, Head of Research at Optimus Research, told Business Recorder earlier this month.

“Due to this, auto companies lost orders. Moreover, there was also a demand slowdown due to high prices, thus a shutdown was the only feasible option,” he said.