Pak Suzuki Motor Company (PSMC) held an analyst briefing earlier today to discuss the company’s financial results and future prospects for the first quarter of 2022.
The State Bank of Pakistan expects a 5-10 percent drop in sales in the fiscal year 2023 (FY 2023) as a result of price hikes, interest rate hikes, and consumer finance tenure restrictions (SBP).
Consumer financing accounts for 35% of PSMC’s total sales, according to the company. According to the company, approximately 40% of PSMC’s target customers are from rural areas, while 60% are from urban areas.
According to the company, gross margins fell from 3.6 percent in the fourth quarter of 2021 to 2.8 percent in the first quarter of 2022. Currency depreciation, higher inflation, and supply chain issues all contributed to the steep increase in freight costs. However, PSMC anticipates a decrease in freight charges in the coming months.
Swift’s success and Delivery delays
PSMC stated that the ongoing chip shortage is not having a significant impact on the company. It stated that the late delivery charges incurred in 1Q2022 will continue, but at a slower rate in the future. It is also attempting to manage the supply chain so that deliveries are made on time.
Suzuki also claimed to have received 6,500 Swift reservations in just two months. It went on to say that these orders exceeded the expected 1,500 in a month.
Localization
Suzuki has localized the following percentages of its vehicle production:
- Swift 35%
- Cultus 51%
- Wagon R 60%
- Alto 62%
- Bolan 72%
- Ravi 68%
Plans and Prospects for the Future
The company recognizes the demand for hybrid and electric vehicles (EV) and intends to enter those markets in the near future. It did not, however, provide a timeline for the plan’s implementation. It also stated that the company’s profitability will not be impacted by the restrictions on Completely Built-Up (CBU) imports. Any restrictions on Completely Knocked down (CKD) imports, on the other hand, will further reduce its margins.
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