Pak Suzuki Motor Company Limited, which is the largest player in Pakistan’s automobile industry, has announced its financial results for the year ended December 31st, 2019.
The company reported a loss of Rs. 2.92 billion on the back of massive reduction in its sales. The car manufacturing firm had booked a profit of Rs. 1.29 billion in 2018, according to a notice sent to the Pakistan Stock Exchange (PSX) on Friday.
Net sales during the year were recorded at Rs. 116.54 billion, which were down by 2.80% as compared with Rs. 119.85 billion in 2018. The cost of sales of the company inched up by 1.56% to Rs. 114.56 billion as compared to Rs. 112.80 billion. Gross profits dropped by 72.50% to Rs. 1.94 billion compared to Rs. 7.04 billion recorded in 2018.
Rupee devaluation against the US dollar resulted in increased imported material cost, consequently adversely affecting the gross profit margins.
The sales volume during 2019 for cars and light commercial vehicles declined by 16.40% from 133,410 units to 111,543 units.
Mehran has been discontinued by Suzuki and it has been replaced by Alto. The new Alto performed exceptionally well in the depressed market and contributed in lower decline in sales volume and improved market share.
Consequently, higher prices of vehicles have affected the sales volume of the company.
| 2019 Volumes | |||
| Models | 2019 | 2018 | Difference |
| Swift | 3677 | 6145 | -40.16% |
| Cultus | 18615 | 21739 | -14.37% |
| Wagon R | 21079 | 31146 | -32.32% |
| Mehran | 16852 | 40,828 | -58.72% |
| Bolan | 12287 | 13985 | -12.14% |
| Alto | 25343 | – | – |
| Ravi | 13690 | 19567 | -30.04% |
| Total | 111,543 | 133,410 | -16.40% |
The company sold over 22,353 units of motorcycles as compared to 29,350 units in the same period last year, down by almost 24% in 2019.
There was a 4.74 times increase in finance cost due to an increase in debt borrowings and an increase in interest rates. Lower customer deposits forced the company to rely on borrowings to finance its working capital requirements, which resulted in a massive increase of 474.60% to Rs. 2.08 billion in finance cost against Rs. 362 million in 2018.
Administrative cost increased to Rs. 2.52 billion, while other income of the company decreased by 61% to Rs. 222 million from Rs. 565.94 million. The company reported a loss per share of Rs. 35.49 in 2019 as compared with earnings per share of Rs. 15.77 in 2018.
It is pertinent to mention that the company booked a tax credit of Rs. 2.92 billion during the year due to reduction of Deferred Tax Asset. It had reported a loss before tax of Rs. 4.95 billion and after the tax credit, the loss was minimized to Rs. 2.92 billion in 2019.
Lower interest rates to help the Auto Sector move forward
Adnan Sami Sheikh, a senior market analyst noted down that lower commodity prices and lower interest rates may help the auto sector going forward. But he warned that the global automakers are shutting down factories worldwide due to a slowdown in demand. He further added that Ford, General Motors and Fiat Chrysler Automobiles announced that they will suspend all production in the US, Canada and Mexico as they step up to help stop the spread of the coronavirus.
He advised employers should act responsibly and send their workers home to curb the spread of coronavirus.
Despite being in loss they are not revising the price, which will help them in there sales.
Increase in price, decrease the sale.
Why people pay for extreme poor body Mehran 100% the price increase to it’s actual worth.
Allah loss mai barkat daiye
Aur karo 3 lac ke gari 15 ke
Pas g tusi great ho
Suzuki is extremely worst I hope that it will enhance loss in future due to Fazool cars.
بھائی قیمت کم کرو اپنے ٹین ڈبوں کی
Good # bohet maal kamaya hi in logo nay , rates to asay behatay hain jasay sonay ki car ho..
اللہ رب العزت آپکے خسارے میں مزید اضافہ فرمائے تاکہ آپ اپنا کچرا مزید اس عوام کےگلے نہ ڈال سکے
The foolish company selling bad product at a very high price.
I was expecting the loss and even more than that…. Close & shut down completely.
بہت کم گھاٹا ہے لیکن پھر بھی سن کر بہت خوشی ہوئی کہ عوام کو عقل آنی شروع ہو گئی ہے۔۔۔
اللّٰہ پاک سے دعا ہے کہ اگر آپ کی حرکتیں جاری رہتی ہیں تو اس سے بڑی بربادی آپ کا مقدر بنے۔آمین
Jaysa karo gay waysa bahroo gay
کتنا اچھا ہو گا.فکٹری ہی بند ہو جائےgiving a poor product in high price.
MashaAllah….. Boht achi bat hy
Allah Paak behtr hisaab lene wala hy
Logon ko gadyon sy mehroom kr k car companies ko kia mila just a lost lost lost even though agr thora sa porfit rakh kr sale out krty tu aaj dewalia na nikla howa hota this is what we called k AS U SOO ,SO SELL U REAP bhayooo !!!!?
Pak Suzuki toyota honda sb k sb agr yh 200 % ka profit margin na rakhty aur just aik lac do do lack rakhty apnay har products py tu aaj chandi hoti in logon ke bhayoooo !!!!
سوزوکی نیا کی گھٹیا ترین کوالٹی ہے اس پر تو ویسے ہی بین ہونا چاہئے تھا
Pak suzuki are very lower then japanes. japnies Cars are excellent in quality. Product reliability. Safety security long lasting ( pak suzuki eat pakistani ) japnies served there Nation japanies zindhabad
Extremely happy to read Suzuki Pakistan is making a loss. They deserve more loss and humiliation. Koi sharam hote hai, koi haya hoti hai…. They have been looting people of Pakistan for decades by selling below standard products on exorbitant prices.
Allah aur bhi Suzuki ko tabah kare ga. They’ve shown themselves to be greedy bastards who continuously ripped off poor Pakistanis due to lack of market competition.