Monitoring desk
ISLAMABAD/KARACHI: Pakistan Suzuki Motor Company has stopped booking fresh orders for its motorcycles due to import-based supply chain constraints and uncertain production prospects.
In a letter to its motorcycle dealers on Thursday, the automaker of Pakistan wrote that under the current economic situation, import-based supply chain constraints, and undetermined production possibilities, “we are unable to serve new customers.”
Suzuki company notice
“We have stopped new bookings for our bikes products from 20 January for the time being,” said the company notice. Bookings could resume when the circumstances become favourable to serve new customers.
The move didn’t surprise analysts, who questioned accepting fresh orders when many industries had been closed down and no raw material was being imported.
Wasil Zaman auto analyst, said that “I would not be surprised if car bookings are also halted; industries are closed with restrictions on the import of goods, so what is a point of taking fresh orders,”.
Pakistan Chairman of the Association of Motorcycle Assemblers, Sabir Shaikh, pointed out that “the problem is arising due to the rupee’s depreciation and curbs on opening Letters of Credit (LCs),”.
“Unavailability of completely knocked down parts and the fluctuating exchange rate are preventing enterprises from determining the price of their goods.”
Referring to the State Bank of Pakistan’s assurances that US dollars could be available in the coming weeks, he hoped that once the LC problem was resolved, businesses could be able to restart manufacturing and sales.
“Foreign currency reserves have only increased by 258 million dollars after reducing 3.6 billion dollars in the previous eight weeks,” noted Tahir Abbas, Head of Research at Arif Habib Limited.
He said that Pakistan’s total forex reserves are now 10.4 billion dollars, higher by 256 million dollars. Of these, State Bank of Pakistan reserves stands at 4.6 billion dollars, up by 258 million dollars and commercial bank reserves are 5.8 billion dollars, down by 2 million dollars. Those reserves are enough for only a few weeks of imports.
Although businesses were not able to secure completely knocked down and meet production costs, the situation might be clear in the next two weeks, stated Sabir Shaikh.
Production by the Chinese bike assemblers, who dominate the market, has already decreased by 50 percent to percent, while some firms have shut down completely.
