Pakistan’s auto industry is still in peril. Dwindling sales, production shutdowns, and high taxation have shattered the local car makers. The same is the situation with Pakistan Suzuki Motor Company (PSMC). The company has faced significant challenges in 2023, leading to massive losses of Rs. 10.07 billion.
The reason behind this hefty loss was primarily a steep decline in sales and high taxation, as reported in the company’s financial results for the year.
The sales decline was drastic, with net sales revenue plummeting by nearly 50% to Rs. 102.11 billion compared to the previous year. The company attributed this drop to being non-operational for much of the year due to inventory shortages.
The Details
Despite the decrease in sales, PSMC managed to improve its gross profit to Rs. 17.27 billion, up from Rs. 11.68 billion in the same period last year. This improvement led to a better profit margin of 16.91%, compared to 5.77% in 2022.
However, the company faced a considerable increase in expenses. Administrative expenses rose by over 31% to Rs. 3.89 billion, while other expenses soared to Rs. 2.12 billion, significantly higher than the previous year’s Rs. 8.89 million.
Despite these challenges, PSMC achieved a profit before tax of Rs. 113.49 million, a significant turnaround from the Rs. 3.03 billion losses in 2022. However, hefty taxes amounting to Rs. 10.1 billion wiped out the entire profit, compared to Rs. 3.14 billion paid in the previous year.
Car Sales Decreased By 8% Last Month
After a brief uptick for a month or two, there has been another downturn in car sales. According to the latest report from the Pakistan Automotive Manufacturers Association (PAMA), there was a significant 8% decrease in month-on-month (MoM) car sales, with 9,709 units sold in February 2024 compared to 10,536 vehicles in January 2023.
However, in a year-on-year (YoY) analysis, there’s been a stark increase of 57%. Car manufacturers managed to sell 6,186 cars during the same period last year.
What do you think about industry’s ongoing situation and PSMC’s massive loss? Tell us in the comments section.
