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INTRODUCTION TO PAK SUZUKI
Pak Suzuki Motor Company Limited (PSMCL) is public limited company with its shares
quoted on Stock Exchanges in Pakistan. The Company was formed in August 1983 in
accordance with the terms of a joint venture agreement between Pakistan Automobile
Corporation Limited (representing Government of Pakistan) and Suzuki Motor Corporation
(SMC) - Japan. The Company started commercial production in January 1984 with the primary
objective of progressive manufacturing, assembling and marketing of cars, Pickups, Vans and
4x4 vehicles in Pakistan. The Companys long term plans inter-alia includes tapping of export
markets.
The foundation stone laying ceremony of the Companys existing plant located at Bin Qasim
was performed in early 1989 by the Prime Minister then in office. By early 1990, on
completion of first phase of this plant, in-house assembly of all the Suzuki engines started. In
1992, the plant was completed and production of the Margalla Car commenced. Presently the
entire range of Suzuki products currently marketed in Pakistan is being produced at this plant.
Under the Governments privatization policy, the Company was privatized and placed under
the Japanese management in September 1992. At the time of privatization, SMC increased its
equity from 25% to 40%. Subsequently, SMC progressively increased its equity to 73.09% by
purchasing remaining shares from PACO.
The Suzuki Management immediately after privatization started expansion of the existing plant
to increase its installed capacity to 50,000 per annum. The expansion was completed in July
1994. However capacity remained substantially under-utilized until 2002 because of economic
recession. Thereafter realizing growth in demand, the Company increased capacity in phases.
The first phase was completed in January 2005 when capacity was enhanced to 80,000 vehicles
.The second phase was completed in January 2006 and capacity was raised to 120,000. The
third phase was completed when on 6th February 2007 Prime Minister of Pakistan Mr. Shaukat
Aziz inaugurated 150,000 vehicles capacity expansion facilities.
On 25th April 2007, the Board of Directors of Pak Suzuki Motor Company Limited (PSMCL)
and Suzuki Motorcycles Pakistan Limited (SMPL) approved Scheme of Arrangement (The
Scheme) to amalgamate SMPL into PSMCL with effect from 1st January 2007. The schemewas approved by the shareholders of the respective Companies at the Extra-Ordinary General
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Meeting held on 30th June 2007. The scheme was sanctioned by the Honorable High Court of
Sindh (the court) on 17th September 2007. The certified copy of the Order of the Court
sanctioning the scheme was filed with the Registrar Companies Karachi on 1st October 2007,
from which date the scheme became operative. PSMCL and Suzuki Motor Corporation (SMC)
Japan held 41% and 43% shares in SMPL respectively. Pak Suzuki issued and allotted
1,233,300 ordinary shares of Rs.10/- each to the qualifying shareholders of SMPL @ one
ordinary share in Pak Suzuki for every twenty one shares held by SMPL shareholders as on the
date of final book closure i.e. 29th October 2007.The trading of shares of SMPL on Karachi
and Lahore Stock Exchanges ceased from the same date. The Company continues to be in the
fore-front of automobile industry of Pakistan. Over a period of time, the Company has
developed an effective and comprehensive network of sales, service and spares parts dealers
who cater to the needs of customers and render effective after-sale service country wide.
1. Statement of Ethics and Business Practices
i. Pak Suzuki insists on integrity and honesty of its employees in doing business. Any
unfair or corrupt practice to solicit business is fundamentally inconsistent with business
codes of Company.
ii. Pak Suzuki believes in compliance to regulatory obligations.
iii. Pak Suzuki believes in free and fair business practices and open competitive markets.
Developing any association with competitors to distort the pricing and supply of
products is contradictory to Companys business code of conduct.
iv. Pak Suzuki believes in transparency in business transactions and they are to be recorded
accurately and fairly in books of accounts in accordance with standard procedures.
v. Pak Suzuki expects its employees to act in Companys best interest while holding
confidential Information. Company expects its employees neither to solicit internal
information from others nor to disclose Companys data or any other material
information to any un- authorized person/body.
vi. Pak Suzuki believes in individuals respect and growth. Its employment policies do not
discriminate on the basis of race, religion, gender or any other factor.
vii. Pak Suzuki does not believe in political affiliation.
2. Corporate Strategy
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Pak Suzuki is built on the idea of a responsible corporate citizenship thereby managing quality,
environmental, safety & occupational health matters as an integral part of our business. In
fulfilling this responsibility Pak Suzuki adheres to the following fundamental principles:
i. We are committed to provide top quality products at competitive price to the
satisfaction and requirement of our customers.
ii. We conduct our operations in compliance with applicable environmental, occupational
health & safety laws and regulations. Even where existing laws & regulations are not
adequate we undertake to operate in a responsible manner by assuring the HS&E
integrity of our processes and facilities.
iii. We recognize the interrelationship between energy and the environment, and we
promote the efficient use of energy throughout our system.
iv. We ensure safe disposal of waste generated from our facility and will minimize the
discharge of waste materials into the environment by utilizing responsible pollution
control practices.
v. We will continuously seek opportunities to improve our adherence to these principles.
SITUATION ANALYSIS
In order to plan in a better way we have to perform situation analysis of general environment,
product environment and customer market.
1. General Environment
As we know most of people in Pakistan associated with middle class families and havent got
enough money to buy a Luxurious car. So they purchase economical vehicles such as Suzuki
Mehran, Alto and bikes for their convenience. Nowadays our life becomes very fast and every
one try to reach their destination as soon as possible and life style of people is continuously
changing.
Time is the main factor to reach and complete the work so people shift from public Transport to
their personal convenience, so everyone prefers to have his/her own car. According to
environment of Pakistan Pak Suzuki will be most suitable in available vehicles from middleclass to upper class.
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Price:
Liana 1.3 RXI MT, PKR. 1,232,000/-
Liana 1.3 RXI MT, CNG, PKR. 1,301,000/-
Colors: Pearl Red, Graphite Grey, Solid white, Indigo, Silky Silver, Aqua Blue, Eminent Blue.
CULTUS (1000cc)
Cultus is the blend of space and craft. Its trim body Conceals ample space & flexibility for both
passenger and storage. Cultus ensures everyone, exceptional Value and quality.
Price:
Cultus VXRi, PKR. 905,000/-
Cultus VXRi CNG, PKR. 965,000/-
Colors: Pearl Red, Graphite Grey, Solid white, Indigo, Silky Silver, Aqua Blue, Eminent Blue
ALTO (1000cc)
Alto has a bright, roomy and comfortable cabin which keeps body relax and strong and lighter
body shell resulting in smooth drive due to reduction of unpleasant noise harshness and
vibration. Its small turning radius and compact body make parking a breeze.
Price:
Alto VXR, PKR. 707,000/-
Alto VXR, CNG, PKR. 771,000/-
Colors: Olive Green, Pearl Red, Graphite Grey, Solid white, Indigo, Silky Silver, Aqua Blue,
Eminent Blue
MEHRAN
Mehran is Pakistans largest selling car. Mehran has bright roomy and comfortable cabin which
keeps body relaxed and has a strong and lighter body shell resulting in smooth drive due to
reduction of unpleasant noise harshness and vibration. More smart features like head turning
lamp, matching front grill and a two spoke steering wheel gives it the tidy look. Functional
economy, peak performance or unmatched fuel efficiency, Mehran VXR is the leader.
Price:
Mehran VX, PKR. 495,000/-
Mehran VX CNG, PKR. 556,000/-
Mehran VXR, PKR. 547,000/-
Mehran VXR, CNG PKR. 605,000/-
Colors: Pearl Red, Graphite Grey, Solid white, Silky Silver, Eminent Blue
APV
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The New APV gives you everything you ever wanted in your vehicle, Spacious interior for
comfort, tough engine to carry large loads and plenty of room for passengers to enjoy a
comfortable day long ride with 1500 cc.
Price:
APV 1.5L, PKR. 1,909,000/-
APV 1.5L CNG, PKR. 1,984,000/-
Colors: Pearl Red, Graphite Grey, Solid white, Indigo, Silky Silver, Aqua Blue, Eminent Blue
JIMNY
JIMNY 4X4 JEEP 1300cc (Imported) Steady, sturdy and smart, Suzuki Jimny with new wide
tread brings you the ultimate pleasure of a real4-wheel drive. It has got all the sporting spirit to
go along for adventurous free souls.
Price:
Jimny JLSX M/T, PKR. 1,924,000/-
Jimny JLDX M/T, PKR. 2,073,000/-
Colors: Solid white, Silky Silver
BOLAN VAN
The Suzuki Bolan Hi-roof gives you everything you ever wanted in a van, Spacious
interior for comfort, tough engine to carry large loads and plenty of room for passengers to
enjoy a comfort-able day long ride. Air-conditioned model (dual thrust) has been recently
introduced.
Price:
Bolan VX, PKR. 574,000/-
Bolan VXR, PKR. 633,000/-
Bolan VX CNG, PKR. 640,000/-
Bolan VXR CNG, PKR. 701,000/-
Colors: Pearl Red, Solid white, Silky Silver
RAVI PICK UP
Suzuki Ravi is the veritable cargo vehicle with an amazing capacity for load bearing
and durability. Undoubtedly, the unrivalled commercial vehicle in its class, Ravi is the
breadwinner for millions in Pakistan. This light commercial vehicle referred to as the mini
revolution, replaced the animal-drawn vehicles in Pakistan.
Price:
Ravi VX, PKR. 522,000/-
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Ravi VX CNG, PKR. 586,000/-
Colors: Pearl Red, Solid white, Silky Silver.
3. Customer Market
Customer market and customer buying behavior can be categorized as Demographic factor,
Usage pattern and behavior and preference of specific and benefit.
i. Demographic factor:
Target market of Pak Suzuki according to Age, Gender and Income:
Age: 20 year to upwards
Gender: Male and Female
Income: Starting from Rs.20000
Life Style: Customer Life style of Pak Suzuki in terms of
AIO:Can be described as:
o Activities: Early Professional, Executives, House Hold, and Business Purpose.
o Interest: Personal Use, Luxury.
o Opinion: Sensitive, Conscious, Responsible and Social.
ii. Usage pattern and behavior:
Mostly People use such vehicle for their convenience e.g. go for job and for family use, for
Business Purpose along with comfortable drive, relaxation and affordability.
iii. Preference of specific end benefit:
Customers who use such vehicle are sensitive, conscious and responsible people. They tried
their level best to save time as much as possible so they want something which is quality wise
good and also affordable.
SWOT ANALYSIS
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1. Strength
1. Highest market share with low price vehicles
2. Resale of local assembled cars
3. Large distribution channel
4. Rising per capita income with changing demographic distribution
5. Highly innovative and deep product line
6. Highly maintained supply chain
7. Well managed and highly competitive staff
8. Well defined and beurocratic organizational structure
9. Easy available of spare parts
2. Weakness
1. Scarcity of raw material
2. Bargaining power of supplier is low
3. Lack of coordination & linkage with government and semi government supporting
bodies
4. Less technical training institute
5. Less distribution channels in sub urban
3. Opportunities
1. Increasing demand for cars
2. Efficient Efi engine
3. Large market size to operate
4. Global spare part market
5. Space saving small size CNG cylinders
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4. Threat
1. Local competitors like Toyota, Honda and Hyundai
2. Foreign investment and setup production facilities
3. Smuggling of auto parts
4. Inflation rate
5. Heavy taxes
6. Competition from import cars
7. Increase in fuel prices
PEST ANALYSIS
Uncontrollable environment are those external factors which can prohibit us or can create
hurdles between us and our business. It is also called pest analyses which are as follow:
1. Political Environment
Pakistan has to face lots of ups and down since its independence. So many governments have
been broken down by military authority and most of the time marsh law applied on Pakistan. In
this scenario no entrepreneur was willing to invest in Pakistan except few, due to this market
environment wasnt good in Pakistan. Anyhow Pakistani government never has been trust
worthy for any investor.
2. Legal Environment
As all countries, Pakistan also has some legislation about each sector. But like developing
countries it is hardly being imposed by authorities. Only due to corruption government
encourage smuggling and black marketing. When anyone supported by government or give
more commission to Govt. get inside in the market and they have very soft behavior by
government for any legal action. Such unethical activities destroy all law and legislation.
3. Economic Environment
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Pakistan, an impoverished and underdeveloped country, has suffered from decades of
internal political disputes and external ongoing conflict with India. However IMF approved
government policies encourages by different foreign assistance and renewed access to global
market since 2001. By the following policies government succeed to reserve the situation of
economy during last passed years.
4. Socio-Culture Environment
Pakistan has strong culture background and it has been follow in some particular region of
Pakistan strictly. But with the passage of time it is going to change. Thoughts of people,
choices, taste and style has been totally changed. If we talk about transportation source in
Pakistan, people use buses, pickups for journey. They also have their own convenience like
cycle, bikes, vehicles etc and lots of people are pedestrian, but now people who havent any
source of transportation they also want something for their convenience because they want to
save their time as much s they can. People want to use such vehicle which looks beautiful and
also affordable.
5. Technological Environment
Technological factor is also very important and we havent control on it. Technology is
grooming with the passage of time. People also want that the product that they have is full of
technology. We never control on technology for example you launched the product last year
and your sale volume on that time is very high but after sometime due to latest invention a lots
of substitute exist in market which affect on your business so you cant hold on it.
[
CONSUMER AND MARKETING MIX RESEARCH
Perception of people about Suzuki Products:
Pak Suzuki product should have excellent fuel consumption and good resale value.
Easily availability of spare parts everywhere even in rural areas.
The quality of product is made according to Pakistan roads and infrastructure.
Product line extension with the very low difference of price.
3S (Sales, Service and spare Parts) at your door step.
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Brand Loyalty.
People want such vehicle which doesnt effect on their prestige and also within the range of
them. So after this research we come to know that Suzuki is best choice for the customer. It is
safer on the road less fuel consumption and Environment friendly product. Because of these
features it is also economical.
1. Customer First
It is our Endeavor to provide top quality services to our valued customers to their entire
requirement and satisfaction, through our After Sales Network across Pakistan. 87 Dealers
workshops with skilled manpower to serve in all major cities are equipped with state of the art
latest technology, tools & equipments and technical manpower to handle conventional and
Electronic Fuel Injection (EFI) system.
Pak Suzuki offers Warranty for all its products for 2 Years and 40,000 Km from the date of
invoice, whichever comes first. (Warranty of 2 Years and 40000 Km for 800 cc vehicle is
applied for vehicles invoiced from Jan, 2010).
2. Marketing Mix Promotion
For Promotion of Suzuki Pakistan Automobiles, we use different medias like Electronic and
Print media (Televisions, Radio, Social Network Websites, Test Drive., Sponsorship,
Newspapers, Bill-boards, etc), we aware our Target Audience through Above Sources in order
to Create their interest.
3. Placement
The Pak Suzuki distributions channels are shown in this diagram.
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4. Market Analysis (Porters five forces)
The strategic business manager seeking to develop an edge over rival firms cause
this model to better understand the industry context in which the firm operates.
Here are the porters five forces:
i. Potential New Entrants
ii. Bargaining Power of Buyers
iii. Bargaining Power of Suppliers
iv. Threat of Substitutes
v. Industry Competi tion/Rivalry between Competitors
i. Potential New Entrants
The New Entrant category of Porter's 5 forces; we can see that it would be
tremendously difficult for another car manufacturer to enter into the market.
The rate at which the industry is changing does not allow for new entrants to come into
the market very easily, and the cash investment for a new firm to produce massive
quantities of cars is in the billions.
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ii. Bargaining Power of Buyers
Buyers from the strong competition inside of the market find themselves in a very
favorable position.
Since competition is so strong between auto makers and dealers, consumers will often
do research on a vehicle before making a purchase.
The high quantity of dealers forces prices to be very negotiable and the consumer often
knows exactly what the dealer paid for the car.
Thus, consumers are in an enviable position. The market supply is strong, competition
between auto makers and auto sellers is very intense and there is no set price.
Everything is negotiable, for companies like Suzuki pak to continue to compete, the
quality of their offerings must be excellent, dealership service must be strong and they
must be focus on offering consumers a product with high durability and value.
iii. Bargaining Power of Suppliers
Pak Suzukis suppliers have been known to be some of the most dedicated suppliers in
the industry.
By virtue of the just-in-by-time production concept pioneered by Suzuki, the auto
industry itself has been very positive relationship develops between its suppliers and
producers.
Suppliers are expected to make deliveries of parts in small quantities several times a
day.
Pak Suzuki by reducing its part inventory, it has been able to speed up production costs,
save money by not letting parts sit on the shelf and improve relationship with parts
suppliers, which rely on Pak Suzuki for their revenue.
iv. Threat of Substitutes
Consumer preference is changing because Mini cars are being replaced by compact
or midsized cars.
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Setting up integrated manufacturing facilities may require higher capital investments
than establishing assembly facilities.
Pakistan is also likely to increasingly serve as the sourcing base for global automotive
companies, and automotive exports are likely to gain increasing importance over the
medium term.
Pakistan passenger car market is moving towards cars of higher capacity.
v. Industry competition / rivalry between competitors
Industry competition between auto makers is fierce
The typical consumer, when searching for a particular vehicle is bombarded by choices.
For example, a search for ALTO (Product of Suzuki) yields a result of Course
(Daihatsu) with a minimal extra amount.
5. Annual Plant Capacity
Company v/s Competitors Car Quantity
Pak Suzuki Motor Company Limited 68,000
Indus Motor Company Limited 34,000
Honda Atlas (Pak) Car Limited 30,000
Deewan Farooq Motors Limited 15,000
Ghandhara Nissan Limited 6,000
6. Business Strategies
Business Strategies planning are to be conducted in order to know about their various
businesses, how each business performing. With the help of these strategies we come to know
which business require investment and in the similar manner which require promotional
activities. We can use the same promotional activities and with the help of the synergy, their
different department (R&D, Marketing, and Sales) can be shared in different business. By
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utilizing synergy we can reduce cost of product and this strategy will help manager to identify
that which SBU is falls in which categories, for that these is an analysis known as BCG Matrix
Analysis which gives detail information to the managers to carry which SBU and how many
resources should a company allocate to which unit.
After analysis from different data we came across the BCG analysis and draw the following
conclusion.
i. BCG Matrix
ii. BCG positons throught the Product Life Cycle of Suzuki Priducts
15
Star
Dog
Question Mark
Cash Cow
Mehran, Alto,Cultus and Ravi
Swift
APV and LIANA
Jimny and Bolan
High
Low
Low High
Market
Growth
Market
Share
Question Mark
Introduction Growth Maturity Decline
SwiftJimny and
Bolan
Mehran,
Alto, Cultus
and Ravi
Liana and
APV
Star Cash Cow Dog
Time
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ENVIRONMENTAL MANAGEMENT SYSTEM (EMS)
Pak Suzuki is built on philosophy of Corporate Citizenship and has committed itself to improve
Environment. ISO 14001:2004 is in place and it is a key factor in operation of the company.
Pak Suzuki continuously monitors the waste generated from its activities and wherever
required has Environmental Control Equipment and facilities in place like waste water
treatment plant. Company provides clean drinking water (tested by approved and certified
laboratories) to all of its employees The Company is complying with applicable regulatory
requirement and ensures its effectiveness against National Environment Quality Standard by
conducting testing of effluents, emissions, etc through renowned testing laboratories.
Hazardous Waste is properly disposed off as per EPA requirement.
PROFIT AND LOSS ACCOUNT
For the year ended December 31, 2010
2010 2009
(Rs 000)
Turnover - net 42,642,762 26,234,061
Cost of sales (41,638,975) (25,664,762)
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Gross Profit 1,003,787 569,299
Distribution costs
Administrative expenses
Other operating income
Finance costs
Other operating expenses
(197,361)
(636,332)
575,078
(21,349)
(55,808)
(214,550)
(495,200)
619,572
(12,564)
(38,714)
(335,772) (141,456)
Profit before taxation 668,015 427,843
Taxation 456,872 172,624
Profit after taxation 211,143 255,219
----Rupees----
Earnings per share - basic and diluted 2.57 3.10
Statement of Comprehensive Income2010 2009
(Rs 000)
Net profit for the year 211,143 255,219
Other comprehensive income
Unrealised gain on derivative financial
instrument - net of tax
2,322 -
Total comprehensive income for theyear
213,465 255,219
FUTURE OUTLOOK OF THE COMPANY (OBJECTIVES)
In future company is going to offer a new activity for its potential and targeted market.
Suzuki Insurance Arrangement Program
It is a complete peace of mind solution to all your Auto Insurance need exclusively available at
Pak Suzuki authorized dealers. This is a Customer focused Auto insurance program with the
following distinct features.
Best Premium Rates
Online / Instant Policy Issuance (Walk in Drive out Insured)
Exclusively repairs at Pak Suzuki authorized dealers workshop only
Quality repairs using Suzuki genuine parts with 6 month warranty on them.
Largest country wide dealer network support
Call center facility
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Fastest claim settlement time
REFERENCES
www.scribd .com/
http://www.paksuzuki.com.pk/Automobile/Pages
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