Pak Suzuki Motor Company (PSMC) has recently faced significant challenges, including poor sales, price hikes, tax rate increases, and import restrictions, which have had a negative impact on the entire auto industry. The government’s proposal to further raise taxes could potentially be the final blow for the company.
As Pakistan’s leading car manufacturer in terms of sales and production volume, PSMC has directly appealed to the interim Prime Minister of Pakistan, Mian Shahbaz Sharif, urging him not to approve the aforementioned tax hike. In their letter, PSMC highlights the severe hardships they are currently facing, which they describe as the worst in their 40-year history. The company has already incurred substantial losses of Rs. 12.9 billion in the first quarter of this year due to the prevailing economic uncertainties. Moreover, PSMC has been forced to implement frequent “No Production Days” throughout the year. The adverse economic and business situation has also greatly affected their dealers and vendors, with some having already shut down and many more on the verge of closure.
Suzuki specifically requests that the Prime Minister refrain from increasing taxes on cars with engine capacities up to 1,000cc. This request seems reasonable considering that the majority of Suzuki’s vehicle lineup consists of cars with engines of 1,000cc or smaller.
The auto industry as a whole has voiced its opposition to the government’s plans for tax hikes in the upcoming budget. Only time will tell if the government will address their collective plea for assistance and take action in response to their distress calls.