PSMCL started production in 1984. In 1989 the foundation stone of the new Bin Qasim plant was laid. Over the years PSMCL has expanded its capacity to 150,000 vehicles per annum. On 25th April 2007 the board of directors of Pak Suzuki Motor Corporation Limited and Suzuki Motorcycles Pakistan (SMPL) Limited decided to amalgamate SMPL into PSMCL.
It has the largest dealership network in Pakistan. PSMCL also has the highest market share and has become a household name in Pakistan. It is manufacturing eight car models; this is the highest number of models manufactured by any automobile manufacturer in Pakistan.
Product range: Automobile:
---- Swift: Swift comes with 1300cc powerful engine. After its successful launch all over the world Pak Suzuki decided to launch the New Swift in Pakistan.
---- Liana: Liana also comes in 1300cc category it is the most luxurious model offered by PSMCL in Pakistan.
---- Cultus: Cultus is Suzuki's one of the most demanded cars in Pakistan. It comes in a hatchback body style with a 1000cc engine.
---- Alto: Alto comes in 1000cc range and has a futuristic and elegant look.
---- Mehran: Mehran has an 800cc engine displacement its small engine size makes it an economical choice.
---- Bolan van: it is a smart family choice and has handsome seating capacity of up to 8 people.
---- Cargo van: It is a true business partner and has plenty room to store and fulfil your business needs. it is the favourite choice of commercial transporters.
---- Ravi pickup: it comes in an open back body shape .it is a tough commercial version of the Bolan van.
---- Imported: APV and Jimny are not yet manufactured in Pakistan. Both have a high demand in Pakistani market.
Motorcycles:
---- Sprinter Eco: The new Sprinter Eco comes with 100cc engine displacement which makes it economical as well as ecological.
---- Sprinter: It's the beat of every heart. Sprinter has a 4-stroke air-cooled single cylinder engine. It also comes in 100cc.
---- Gs 150: Gs 150 is for those who love the thrill of speed. It comes with a 12 litres fuel tank and electric/kick starter system.
---- Shogun: Shogun comes with a 2-stroke air-cooled rotary disc valve engine. It has a primary kick starter system.
Brief industry review of 1HCY11 The first half of calendar year 2011 has been a good year for automobile manufacturers of Pakistan; the automobile industry has experienced a growth of 6.5 percent. The production level rose from last year's 76,639 units to 81,580 units, for the same period January to June.
The growth in automobile sector, both two wheelers and four wheelers is attributed mainly to the good agriculture support prices set by the government and record high remittances. The rising raw material prices and power shortages have been hindering the growth, adding to the misery of auto-makers are the government's inconsistent policies.
PSMC review of 1HCY11 Government's decision to reduce sales tax to 16 percent from 17 percent and abolish 2.5 percent special excise duty will boost sales volume since Pak Suzuki has passed on the tax relief to its customers by reducing prices.
On the other hand, the government's lenient used car import policy is sweeping away local auto manufacturers' market share and is a threat to Pak Suzuki. The worsening law and order situation and fuelling inflation due to constant rupee depreciation have raised the manufacturing cost for Pak Suzuki. The rupee depreciated by around 6.88 percent from January to June 2011. The company has plans to increase its localisation level to minimise foreign exchange risk.
Production and sales Pak Suzuki produced 45,976 units of cars and light commercial vehicles against 38,386 units produced in the same period last year. PSMCL sold 41,783 units in 1HCY11 which is 3 percent higher than the same period last year. It is been successful in maintaining its 53 percent market share.
The overall motorcycle demand has also risen by 15 percent in 1HCY11 447,240 units were sold as compared to 388,217 units sold during 1HCY10. Out of this total Pak Suzuki sold 10,557 units against 9,885 units sold in 1HCY10.
Profit margins The company groups its products into two categories automobile and motorcycle. In 1HCY11, the motorcycle segment had a gross loss of around Rs 70 million and an operating loss of around Rs 181 million, against Rs 60 million and Rs 164 million in 1HCY10, even though the top line grew by 13 percent.
In the automobile segment, gross profit increased by 17 percent and operating profit rose by 20 percent. The increase in distribution costs and administrative costs is due to increase in petrol prices and utilities.
Other operating income Income other than normal operations of PSMCL is generated mainly from bank deposits. The decrease of about 15 percent in other income is owed to decrease in the bank deposits due to blockade of funds in withholding tax (deducted at customs stage). The ratio of other operating income to gross profit has decreased from 44.2 percent in 1HCY10 to 32.8 percent in 1HCY11.
Debt management PSMCL's debt to asset ratio is about 0.347 for 1HCY11. It has increased from 0.247 in CY10. The increase is mainly due to a big increase in advances from customers. The simultaneous increase in assets has kept the debt to asset ratio to a manageable level.
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PAK SUZUKI MOTORS CORPORATION LIMITED
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Rs (mn) 1HCY11 1HCY10 CY10 CY09 CY08
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Turnover 23,250 21,930 42,642 26,234 39,669
Cost of sales 22,427 21,226 41,639 25,665 39,081
Gross profit 823 703 1,003 569 588
Other operating income 270 311 575 619 1,347
Profit before taxation 545 514 668 427 992
Profit after taxation 278 279 211 255 624
Earning per share (Rs) 3.39 3.39 2.60 3.10 7.60
Gross profit margin % 3.53 3.20 2.40 2.20 1.50
Net profit margin % 1.19 1.27 0.50 1.00 1.60
Other operating income to sales % 1.16 1.40 1.30 2.30 3.30
Debt to equity 0.53 0.33 0.25 0.18 0.15
Debt to assets 0.35 0.25 0.25 0.19 0.17
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Source: Company accounts
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