KARACHI: Honda Atlas Cars Ltd (HACL) has reduced working days to 11 in September due to rising unsold stocks and depressed demand. The working days were 13 in August and 20 in July. However, the situation at Pak Suzuki Motor Company Ltd (PSMCL) is less critical.
So far PSMCL had not observed any ‘non production days (NPDs)’ as the new Alto 660cc has seen continued demand and emerged as the main driving force for the company with sale of 8,109 units during July-August 2019. This is despite the 71.5 per cent sales plunge in its flagship WagonR during July-August 2019 compared to same period in 2018.
Pak Suzuki registered a loss of Rs1.53 billion in the six months ended June 30, 2019. Nevertheless, the company did not shut its plants for extra days as its two competitors did.
In 2019 Indus Motor and Honda Atlas increased their production capacity from 54,800 units to 65,000 units and from 50,000 units to 55,000 units respectively. Therefore, they had to cut their working days when demand in the auto market declined to owe to rupee depreciation of about 33% against the dollar in 2019.
Indus Motor’s gross profit margins decreased from 17% last year to 10.5% this year, he said. Earnings per share of Honda Atlas Cars declined from Rs46 last year to Rs26 in 2019 and then reached only Rs1.5 in the last quarter.