The Efficacy of Managing The Financial Stability of Automobile Sector Firms and Its Influence on Their Market Value

Abstract

The automobile industry plays a vital role in national economies, with strong interlinkages to multiple sectors and a significant multiplier effect on employment, innovation, and industrial competitiveness. In Uzbekistan, the automotive sector—represented by major players such as UzAuto Motors JSC and the Jizzakh Automobile Plant—has been central to the government’s industrial modernisation strategy, emphasising import substitution, domestic capacity building, and global market integration. While prior studies have examined global automotive financial stability, there is limited empirical analysis of Uzbekistan’s automotive firms in the context of liquidity, capital structure, and operational efficiency over extended periods. This study investigates the financial stability of the two leading Uzbek automotive firms between 2018 and 2023 through financial ratio analysis and time-series evaluation, focusing on liquidity, profitability, capital structure, and working capital efficiency. Findings reveal robust revenue growth, asset expansion, and profitability gains, with Jizzakh’s net profit quadrupling over the period. However, UzAuto Motors experienced a persistent decline in liquidity ratios, with the current ratio falling from 1.61 to 0.54 and the quick ratio from 1.11 to 0.38, alongside reduced financial independence and prolonged receivables collection periods in both firms. This study provides the first comprehensive, multi-year, firm-level financial stability assessment of Uzbekistan’s automotive sector, linking ratio trends with strategic management needs in an emerging market context. The results highlight the urgency of liquidity enhancement, debt structure optimisation, and reinvestment in advanced manufacturing technologies to ensure resilience, competitiveness, and sustainable growth in the face of market fluctuations and global supply chain challenges.