Due to supply chain restrictions caused by imports and unclear production outputs, Pak Suzuki Motor Company has temporarily halted accepting new motorbike orders.
What happened:
On January 20, the manufacturer stated in a statement to its dealers, “We are unable to serve new customers. This is due to the current economic climate and import-based supply chain restrictions. Unpredictable manufacturing possibilities also have a big impact.”
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The corporate notice also assured that bookings will continue as soon as the environment is suitable for accommodating new clients.
What the analysts have to say about this:
Wasil Zaman, an auto analyst at JS Global was not surprised by the decision. He had previously questioned the purpose of accepting new orders when numerous plants were being closed. Zaman claimed that no raw materials were being imported either.
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Sabir Shaikh, the chairman of the Association of Pakistan Motorcycle Assemblers (APMA), noted that the issue was caused by the weakening of currency and restrictions on opening Letters of Credit.
Enterprises are unable to set the pricing for their products due to the lack of completely knocked down (CKD) parts and the shifting exchange rate.
Tahir Abbas, Head of Research at Arif Habib Limited, observed that “foreign currency reserves have only increased by $258 million after declining $3.6 billion in the last 8 weeks.”
What you need to know:
The overall foreign exchange reserves of Pakistan are currently $10.4 billion. SBP’s reserves currently total $4.6 billion, while commercial bank reserves total $5.8 billion; this marks a decrease of $2 million. Only a few weeks’ worth of imports could be covered by those reserves, he claimed.
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