Pak Suzuki Motor Company (PSMC) held an analyst briefing earlier today to highlight the company's financial results for the first quarter of 2022 (Q1 2022) and its future prospects.
It expects sales to decline by 5-10% in FY 2023 (FY2023) due to price increases, higher interest rates and consumer fiscal constraints by the State Bank of Pakistan (SBP).
PSMC claims 35% of its total sales come from consumer financing. As per the details, about 40% of PSMC's target customers are rural while 60% are urban.
The company claims that the gross profit margin fell from 3.6% in the fourth quarter of 2021 to 2.8% in the first quarter of 2022.
The decline was due to currency devaluation, rising inflation, and supply chain problems, which led to a sharp rise in shipping costs. However, PSMC expects lower shipping charges in the coming months.
Delivery Delays and Swift’s Success.
PSMC said it did not see any serious impact from the ongoing chip shortage. He noted that late delivery charges in the first quarter of 2022 will continue to move forward, but at a slower pace. It also tries to organize the supply chain for just-in-time delivery.
Suzuki also claims to have received 6,500 reservations for the new Swift in two months. He added that these requests exceeded the expected 1,500 orders in one month.
Localization.
Suzuki has localized the production of its vehicles by the following percentages:
- Swift 35%
- Cultus 51%
- Wagon R 60%
- Alto 62%
- Bolan 72%
- Ravi 68%
Future Plans and Prospects.
The company recognizes the demand for hybrid and electric vehicles (EVs) and intends to enter these areas in the future. However, he did not give a timetable for the implementation of the plan.
He added that full import sanctions (CBU) would not affect the company's profits. However, any restriction on fully restricted imports (CKD) will further reduce its margins.
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