PSMC announces shutdown of automobile plant

Pak Suzuki Motor Company (PSMC) on Wednesday announced another temporary shutdown of its automobile plant.

In its notice to the Pakistan Stock Exchange (PSX), PSMC said: “Due to shortage of inventory level, the management of the company has decided to shut-down its automobile plant from October 25, 2023 to October 27, 2023.”

Meanwhile, the motorcycle plant will remain operative.

During the course of the year, the Japanese automaker has announced shutdowns over a dozen times. Last month, it said it would keep its motorcycle plant shut till September 15.

It made similar announcements in August, June and May as well, citing a lack of raw material.

Last week, PSMC said that it will review and consider the majority shareholder’s intent to purchase all outstanding shares of the company and delist from the PSX.

Citing a drop in sales and high financing costs, the Japanese automaker announced losses to the tune of Rs9.68 billion in the first six months of FY2022-23.

Auto sector woes

The country’s auto sector, hugely dependent on imports, has been hit hard by the government’s decision to curb imports and restrict issuance of LCs. Additionally, higher finance cost and massive increase in car prices have also reduced demand from consumers.

In the first quarter of FY24, sales stood at 20,983 units, down 40% as compared to the same period in the previous year.

Days ago, Indus Motor Company (IMC), the assembler of Toyota vehicles in Pakistan, announced a month-long shutdown of its production, citing inventory shortages.

“The company has decided to close its production plant from 17 October 2023 to 17 November 2023 (both days inclusive),” the company said in a PSX statement.