The local auto industry has been grappling with the effects of the ongoing economic crisis and import restrictions imposed in May’22. Both carmakers and bike manufacturers are experiencing a significant decline in sales and production, leading to a dire situation for the industry.
Plummeting Bike Sales:
Recent reports reveal a sharp decline in bike sales, affecting major manufacturers like Yamaha, Suzuki, and Honda. Suzuki experienced a month-over-month (MoM) decrease of 40%, selling only 1,156 bikes in April 2023. Yamaha faced an even larger slump with an MoM decrease of 50.4%, selling just 841 bikes last month. In contrast, Honda observed a slight increase in sales, showing an MoM jump of 2.4%.
Reasons Behind the Decline:
While the motorcycle makers have not explicitly stated the reasons for this downturn, analysts attribute it to import curbs and production cuts that have been implemented for several weeks. Moreover, consecutive price hikes in bikes and the impact of inflation have significantly reduced the purchasing power of customers, contributing to the decline in sales.
Pak Suzuki’s Production Cut:
Amid the ongoing economic meltdown and uncertainty in the local auto industry, Pak Suzuki, one of the affected companies, has announced a significant production cut. Due to a shortage of inventory, the company will halt bike production for approximately three weeks, or 19 days, from May 23 to June 10. This move further reflects the challenging situation faced by manufacturers.
Impact of Economic Factors:
Several economic factors have played a role in the downfall of the bike industry. The depreciation of the rupee, depleted foreign exchange reserves resulting from the government’s financial policies, soaring inflation rates, and the import embargo imposed by the State Bank of Pakistan have not only disrupted the country’s car industry but have also caused significant shocks to the bike sector.
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