pak suzuki company, 1.5 billion

Pak Suzuki Company PVT LTD released financial data of the first half of 2019, which ended on 30th June 2019. The company reports a loss of 1.5 billion.

Pak Suzuki is one of the big players in automobile manufacturing in Pakistan. The Japanese giant is also an affectee of the economic change in Pakistan. During the first half of the financial year 2018, Pak Suzuki was in profit. Last year, Pak Suzuki showed a profit of 1.29 billion during the first half. But,  this year, they reported a loss of 1.5 Billion in the same half.

Despite the decline in profits, the auto giant has managed to increase the volume of sales. The combined sales this year has jumped 4.86% to 65.42 billion rupees, and previous year it was at 62.39 billion rupees.

The number of cars sold has decreased by 11.26%. The reason behind the increase in net sales is the hike in car prices and a drop in the volume of car sold is due to slow economic prices. People are not buying enough cars.

Presently, the auto industry is facing difficulties in manufacturing. The govt has imposed a 5% advanced custom duty (ACD) on the import of raw material, which subsequently increased the cost of production.

The depreciation of the value of the currency against the dollar also adds to the cost of manufacturing.

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The govt has also lodged federal excise duty which is the most criticized. Due to this the cost of sales has also increased. The auto industry is now bearing multiple taxes, duties, and depreciation of the rupee. Furthermore, the interest rate is killing the gross profit margin. The recent increase in interest rate by the State Bank has eaten out the growth. Auto industry manufacturers are now in a situation where it is hard to break even.

The share price of Pak Suzuki Company has dropped by 18.53 rupees despite the earing of 15.33 rupees per share in the previous year.

However, Pak Suzuki has received 600 million rupees in tax reversals. Experts are indicating 2019 as a slow year for the auto industry.

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