Pakistan Suzuki motors loss 1.52 billion in 2020
  Aug 28, 2023     talha seo  

Suzuki motors is one the most famous automobile brand and known as largest player in Pakistan also bring reliable vehicles. It owns number of buyers all over the country. Currently it is the largest car assembler in Pakistan. Pak Suzuki motors is subsidiary of Japanese automaker Suzuki. It got market share of 50% in past years but now many competitors came in front line to take on likes.

 Despite of launch of many amazing cars like hybrids Alto VX, Alto VXR, wagon R etc. in this year, sale of Suzuki motors got low which provided much loss to Suzuki motors. In history of this automobile brand it was a much loss for the company. This loss is due to low sales of vehicles of Suzuki motors.

Reasons of Pakistan Suzuki Motors Loss:



Reason 1:

Lahore board of directors of Pakistan Suzuki motors announced financial results and performance of company and revealed many aspects of loss. It came as a conclusion that high rates of imported products because of increase in dollar rates, affected company’s yearly profit. To compensate the higher fixed cost rates of the automobiles were raised in order to gain equal profit as it was made in every year. But this was not a good solution perhaps. Because increasing the prices of vehicles dishearten many consumers. In 2020, the finance cost increased up to 3.23x but sale remain low. Hiking the price of variants costed low sales by 7.3% and -1.0% due to low fixed cost coverage. This low sale leads ultimately loss to the Pakistan Suzuki company.

Reason 2:

Increasing the rates of the vehicles is the one of the reasons of company’s loss. Pandemic in this year did a great loss to every part, every business in Pakistan. Similarly, sale of Suzuki motors got low due to pandemic and lock down issue. COVID -19 brought cost of sale decreased from 66.31% to RS, 10.35 billion which was around 30 billion. Trade stopped, as well as the manufacturing. When there is less sale it leads to less production. In addition, imported parts of cars double the loss. Company’s sale in 2019 was 34.47 billion which fall down to 17.7 billion in this year of 2020. Suzuki motors losses is increased in this year by 1.8x which is much greater loss as compared to last year.

In previous seven years, this automobile company faced loss but not like this remarkable one. Collectively it can be called as seven consecutive losses according to the notice sent to Pakistan stock exchange market.

The quarterly loss recorded in the end of march 2020 is of RS. 941 million which increased till this month of august. Distribution and administration costs fall down or decreased by 76% and 22% year on year, respectively.

So, the basic reasons of loss to the Suzuki motors company are pandemic lock down, increased rates to dollar and thus the increase in the prices of company’s automobiles. Pak wheels describes the margins of losses that Suzuki motors had and compared it with the present loss to enlighten the customers about current condition of Pakistan Suzuki motors.

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