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Why Baluchistan Wheels Stops Manufacturing

Baluchistan Wheels stops manufacturing

KARACHI: Due to a major drop in demand from vehicle manufacturers, Baluchistan Wheels, a producer and marketer of automobile wheel rims for small cars, large buses, and trucks, said on Thursday that it will halt production for two weeks.

Firm Secretary Muhammad Asad Saeed informed the Pakistan Stock Exchange (PSX) that the firm was seeing a decline in sales orders as a result of the key clients (original equipment manufacturers or car makers) cutting back on their manufacturing levels.

As a result, the management has decided to temporarily stop all manufacturing operations from August 18 to August 31, 2023, due to non-production days. “Production activities would resume on September 1, 2023,” Saeed said.

The firm has stopped producing for the third time in the last eight months. It intends to deal with the decline in demand for its goods and automobiles brought on by a sharp increase in car costs and an increase in interest rates on auto financing above what is reasonable.

According to Baluchistan Wheels’ most recent financial report for the nine months ending March 31, 2023, sales of automobile wheels fell 41% to Rs624 million from Rs1.05 billion during the same period in the previous year.

The financial report of company

In addition, sales of tractor wheels decreased by 24% to Rs523 million from Rs693 million the year before, while sales of truck and bus wheels fell by 20% to Rs148 million from Rs186 million.

In just July 2023, the demand for automobiles fell by more than half to 7,761 units. According to Foundation Securities Head of Research Awais Ashraf, the demand is anticipated to stabilise around current levels in the ensuing months of the current fiscal year.
Due to government limitations on the import of luxury goods as a result of critically low foreign exchange reserves, a record devaluation of the rupee, and a record-high interest rate, demand for autos such as cars, trucks, tractors, and buses significantly decreased in FY23.

In July, the government lifted all import limitations. Despite this, the analyst predicted that a slowdown in economic growth, a sharp increase in the cost of cars, and a rise in interest rates on auto loans would keep demand for cars low in FY24.

According to the company’s financial report, net profit for the nine-month period fell by 35% to Rs105.93 million from Rs163.08 million during the same time last year.

The decrease in gross and net profit can be linked to the weak demand for wheels across all market categories as a result of the closure of several auto industry assemblers’ plants.


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