PAK SUZUKI MOTOR COMPANY LTD.
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
Mar 02 - 08, 2009
Pak Suzuki Motor Company Ltd (PSMCL) is a Pakistan based automobile manufacturing company. It is a joint venture between Suzuki Motor Corporation of Japan and Pakistan Automobile Corporation. The Company's products include Mehran, Alto, Cultus, Liana, Bolan Van, Ravi Pickup, JIMNY MT, APV, and Potohar.
PSMC PRODUCTION & SALE VEHICLES OCT'08 NOV'08 DEC'08 JAN'09 Suzuki Liana Prod. 149 14 3 - Sale 114 35 158 21 Suzuki Cultus Prod. 1,496 616 521 403 Suzuki Alto Prod. 1,030 306 396 7 Sale 1,231 200 100 733 Suzuki Mehran Prod. 1,759 517 598 494 Sale 1,898 558 208 1,078 Suzuki Bolan Prod. 1,219 1,132 894 709 Sale 1,280 1,257 468 473 Suzuki Potohar Prod. - - - - Sale - - - - Suzuki Ravi Prod. 1,866 1,787 1,420 701 Sale 1,939 2,011 1,061 435 Source: PAMA
There are about 154 active vendors of Pak Suzuki across Karachi to Lahore and Rawalpindi. The dealers of Pak Suzuki perform hallmarked three services of the company: automobile marketing, sales service, and spare parts. The Suzuki plant located in Bin Qasim has a production capacity of 150,000 vehicles per year. The company has facilities like press shop, welding shop, paint shop, engine and transmission assembly shop, final assembly and hi-tech inspection shop.
On 1st Jan 2007, Suzuki Motorcycles Pakistan Ltd has merged with Pak Suzuki motors.
FACILITIES FOR CUSTOMERS
Pak Suzuki produces a wide range of vehicles that serve the widest spectrum of customer needs in the country. Each of the Pak Suzuki products enjoys a unique position of its own and the exceptional success of these vehicles underscores their progressive performance abilities. The difference between Pak Suzuki Motor Company from other automobile assemblers is its PRESS SHOP; PSMC is the only automobile manufacturer which owns this facility. It is the major source of delivering low cost vehicles to the customer.
Before a product rolls out from the Pak Suzuki plant, it goes through state of the art manufacturing processes under strict quality control measures. The press shop consists of the most modern stamping facilities equipped with a Tandem Press Line with more than 1,000 stamping dies. The facility of Tandem Press Line available in Pak Suzuki Motor Company renders it the status of the only car manufacturing company in Pakistan.
FINANCIAL PERFORMANCE (PkR mn) INDICATORS CY07F CY08F CY09F Net sales 50,844 43,768 25,310 Cost of sales 46,084 42,574 24,468 Gross profit 4,760 1,193 842 EBIT 3,360 110 284 Other Income 921 1,023 1,175 Profit before tax 4,281 1,133 1,459 Net Profit 2,775 736 948 Total assets 21,201 22,430 19,954 Shareholders equity 13,977 14,590 15,414 EPS (PkR) 33.72 8.94 11.52 Various sources
Pak Suzuki has reported earnings results for the first quarter of the fiscal year 2009. The company declared PKR 206 million profits after tax or EPS of PKR 2.51 in first quarter of the fiscal year 2009 as compared to PKR 734 million or EPS of PKR 8.94 in the corresponding period of the last fiscal, depicting a significant decline of 71.9%. During the current year, Pakistan Suzuki business environment is likely to become more difficult in view of the worsening macro economic situation in the country and fears of global economic recession emanating from major financial crises abroad. Despite the economic slowdown in the country, PSMC has been able to do better than other automobile assemblers. It is expected that the sales volumes will remain low substantially in entire CY09 on the back of higher car financing costs, lower availability of financing and economic and political instability.
PRICES OF PAK SUZUKI VEHICLES
PRICE INCLUDING SED + ST & FED w.e.f 15/01/2009 Mehran VX 447,000 Mehran VXR CNG 539,000 Alto VX 606,000 Alto VXR CNG 705,000 Cultus VXR 837,000 Cultus VXL CNG 954,000 Ravi Pickup STD 448,000 Ravi Pickup STD CNG 496,000 Bolan Van VTR 511,000 Bolan Van VTR GL CNG 620,000 Liana 1.3L LXI CNG 1,135,000 Liana 1.6L Eminent AT 1,140,000 APV 1.5L GLX MT 1,470,000 APV 1.5L GLX CNG 1,525,000 JIMNY JLX MT 1,750,000 JIMNY JL DX MT 1,620,000 Source: PSMCL
Currently, in Pakistan the automobile sector is facing many challenges and has been experiencing slump. The locally assembled automobiles registered the highest decline. Total production of vehicles declined by 33.8% during the period from April 2008 to December 2008 over the same period last year. The industry has been facing multiple challenges such as higher exchange rate, rising inflation and material prices and particularly, slow down in demand.
To meet the rising cost of production, prices had been increased a couple of times, which has further affected the sales of the industry. The total automobile production during the period under review of ninth month was 88,482 units against 128,492 units last year, down by 31.1%. The sale was 86,376 units against 126,732 units down by 31.8%.
No doubt, Pak Suzuki with heavy presence enjoys market hegemony in the small car segment. PSMC is expected to do comparatively better than its peers in the current economic scenario due to advantage in product line and pricing power. However, the industry needs to be more competitive.