Days lacking production and inadequate localization
  Sep 04, 2023     talha seo  

Days lacking production and inadequate localization

Pak Suzuki has once again announced to extend its factory shutdown owing to limited inventory supply, the business recently told the Pakistan Stock Exchange. The State Bank of Pakistan's need for prior authorization for the import of certain HS codes, including fully knocked-down (CKD) kits, was cited by the firm as having "adversely impacted clearance of import consignment and therefore affected inventory levels."

As a result, Pak Suzuki has now missed 12 of the previous 20 days of production. And as long as there are problems with the import of CKD kits, this situation is probably going to persist. Under an "emergency economic strategy," the government has banned the importation of luxury and non-essential goods in May 2022. Despite the fact that the embargo was ultimately repealed in August, Finance Minister Miftah Ismail had stated that for a while, among other industries, imports would only be permitted at a reduced rate of 50%.

It's interesting to note that Suzuki's motorbike production facility will continue to run. This is just a result of the 2-wheel sector having comparatively greater levels of localization than the 4-wheel sector, which is still highly dependent on imports. Suzuki's decision to discontinue the manufacture of more recent vehicles, like as the Swift (which has yet to attain higher localization), is logical. However, if we go back, Pak Suzuki is an assembler that has dragged most of its models into a decade. It is a big mystery why the corporation was never able to achieve enough localization for so long despite producing outdated and very simple automobiles devoid of any technological gimmicks.

For instance, the MK-II Cultus took 17 years to construct, the second generation Alto, also known as Mehran, took more than 30 years, and the fifth generation 1,000cc Alto took 12 years. However, Pak Suzuki has continued to build the Bolan minivan and Ravi pickup, two ST-90 Carry derivatives, with pride for the past 40 years or so.

It's interesting to note that while Thailand and Indonesia are now producing the most recent model of the Suzuki Carry; neither country is currently making ST-90 or the parts for it. Allegedly made in China, most of the ST-90's components may be easily obtained from alibaba.com.

Consider the F8A engine, which costs roughly $700, the shocks & dampers, which cost $11.5, the brake cylinder, which costs $3, the clutch plate, which costs $5, the steering rack, which costs $6.5, and even the dashboard, which costs less than $10. Even after factoring in the costs of all the essential parts, the ST-90 would still cost no more than $900, which is equivalent to PKR 1.97 lac. Most of these things will cost significantly less if purchased in quantity.

Does this imply that Pak Suzuki is billing us a staggering Rs 1.3 million for the creation of a mere bodyshell? For all the little they have to offer in this day and age, the Bolan is now priced at PKR 1.5 million, while the Ravi is available for PKR 1.42 million.

Production problems will continue as long as import restrictions are in place for componentry. However, the reason PAAPAM (Pakistan Association of Automotive Components & Accessories Manufacturers) can't yet create even the most fundamental items, like the ST-90 parts, is a mystery. However, it is a total failure on the part of Pak Suzuki that the corporation has failed to localize one of the most fundamental vehicles to operate on planet Earth today for more than 40 years.

talha seo