Pak Suzuki Motor Company (PSMC) hosted an analyst meeting earlier today to discuss the company’s financial performance and future expectations for the first quarter of 2022 (1Q 2022).
The State Bank of Pakistan forecasts a 5-10 percent reduction in sales in the fiscal year 2023 (FY 2023) as a result of price hikes, interest rate hikes, and consumer financing tenure limits (SBP).
Consumer finance accounts for 35% of PSMC’s overall sales, according to the company. According to the company, around 40% of PSMC’s target clients are from rural areas, while 60% are from urban areas.
Gross margins fell from 3.6 percent in 4Q2021 to 2.8 percent in 1Q2022, according to the business. Currency depreciation, greater inflation, and supply chain difficulties all contributed to the steep increase in freight prices. However, PSMC anticipates a decrease in freight charges in the following months.
Delivery Delays and Swift’s Success
PSMC indicated that the ongoing chip scarcity is not having a significant impact on the company. It stated that the late delivery charges incurred in 1Q2022 will continue, but at a lesser rate in the future. It is also attempting to control the supply chain so that deliveries are made on schedule.
Suzuki also claimed to have received 6,500 Swift reservations in just two months. It went on to say that these orders exceeded the predicted 1,500 in a month.
Suzuki has localized the production of its vehicles by the following percentages:
- Swift 35%
- Cultus 51%
- Wagon R 60%
- Alto 62%
- Bolan 72%
- Ravi 68%
Future Plans and Prospects
The corporation recognises the demand for hybrid and electric cars (EV) and intends to enter those markets in the near future. It did not, however, provide a date 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 lower its margins.