LAHORE: Pak Suzuki Motor Company (PSMC) has notified the Pakistan Stock Exchange (PSX) that it will be observing non-production days (NDPs) from February 20 to February 21. This will be an extension on its original shutdown from February 13 to February 17. Its motorcycle plant will, however, remain operational.
The company has cited its continued shortage of inventory as the reason to extend its plant shutdown. The company had previously cited the same reason for observing its non-production days (NPD) from January 2 to January 6, from January 9 to January 13, and from January 16 to January 20.
This will also be Suzuki’s single longest continuous stretch of NPDs in 2023, till now. The total number of NPDs being observed subsequently increases from 20 to 22. Suzuki will consequently have spent 22 out of a possible 37 working days in 2023 not having produced a single car.
Suzuki not producing cars for the majority of January is the likely reason for why it saw a 74% month-on-month (MoM) reduction in its sales volume based on data provided by the Pakistan Automotive Manufacturers Association (PAMA). The same could also potentially hold true for the 33% MoM decline it saw with its motorcycle sales. The rationale being that Suzuki’s supply side constraints disabled it from being able to take bookings in the same quantity that it could had the NPDs not been observed. This relationship, however, would be a first for Suzuki.
Suzuki had previously halted production in August, September, and October of 2022. It observed NPDs from August 18 to August 19 , from August 22 to August 26, from August 29 to August 31, from September 6 to September 9, from September 19 to September 23, from October 19 to October 21, and October 24 to October 26. However, Suzuki only saw a Month-on-Month (MoM) decline in August where its sales contracted by 41%. Its MoM figures saw increases of 52% and 33% in September and August respectively based on PAMA’s figures.
PAMA’s figures do depict Year-on-Year (YoY) sales decreases in the aforementioned three months of 2022 where Suzuki saw declines of 67%, 46%, and 22% respectively. These decreases, however, are visible even in those months where Suzuki did not observe NPDs. The YoY declines are a characteristic of the entire automotive industry this fiscal year, with those companies not observing NPDs also falling prey to it. A continuous MoM decline into February might provide a clearer picture as to whether this new relationship between NPDs and declining sales volume actually holds.
