January 8, 2020 (MLN): Pak Suzuki Motor Company (PSMC) has decided to observe three non-production days during the month of January.
According to the media reports, the company informed its vendors that due to the piling up of inventory and depressed demand, it will be shutting down its operations every Monday throughout the month.
Speaking to Mettis Global on the same, an analyst at Foundation Securities said that shutting down of plants and observing non-production days for a prescribed period of time has become a norm for auto companies, as continuous inventory pile up and the slowdown in demand has left them with no other choice.
Apart from the occasional plant shutdowns, some auto players have resumed their price-hiking tradition in order to boost revenues and minimize losses. It may be worth noting that since the start of the new year, Indus Motor Company and Honda Atlas have raised the prices of their models to combat declining margins.
Previously, PSMC had raised the prices of some variants to mitigate its losses. However, this rise in price was justifiable as the company’s margins had fallen to unsustainable levels (PSMC incurred four consecutive quarterly losses).
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