1. WHERE DO WE SEE PAK SUZUKI IN
THE FUTURE
Presented By:
Mohammed Emad
Naveed Bajwa
Mohsin Raza
Umair Yousuf
2. GLOBAL CURRENT AFFAIRS
The world’s economy is said to be still recovering from the shock it
received in 2007-2008.
According to the International Monetary Fund (IMF) the percentage
growth in world GDP is improving since it reached to -0.5% in 2008-
2009.
USA no longer runs the whole economy of the world instead
developing and emerging nations have taken its place.
Developing countries matured by 7.3 percent in 2010 and then acted
steadily at 6.5 percent in 2011.
High unemployment, macro level economic challenges and high
inflation throughout the world have been hampering the smooth
progress towards the road to sustainability.
3. ACCORDING TO IMF
12
10.3 10.4
10 9.6 9.5
9.2
8.2
7.8
8
6.8
6.5
6.1 6.2
6
5
4.6
3.9 Euro (%)
4 3.5
2.8 2.8 2.9 USA (%)
2.1 Japan (%)
1.8 1.8
2 1.4
China (%)
Indonesia (%)
0 India (%)
2008-09 2009-10 2010-11 2011-12
-2
-2.6
-4
-6
-6.3
-8
4. DOMESTIC CURRENT AFFAIRS
Pakistan was badly hit first by the financial crisis which engulfed the
whole world in the year 2008.
Pakistan was yet to fully recover from the earthquake in 2005 which
hit the northern areas, another catastrophe hit in the form of severe
floods in Sind which damaged the already crippling economy of our
country.
Constant energy shortages have also caused a problem to major
industries which do not allow the machines to run efficiently at full
capacity.
The GDP growth in percentage shows that it fell from 3.8% in 2009-
10 to 2.4% in 2010-11. The GDP growth rate for the coming year is
expected to increase to about 4.2% .
5. ACCORDING TO IMF
12
10.4
10
9.1
8.2
7.8
8
6.8 6.9
6.6 6.5
6.3 India
6
5.8 Bangladesh
6
Sri Lanka
Pakistan
4.2
3.8 3.8
4
2.4
1.7
2
0
2008-09 2009-10 2010-11 2011-12
6. PAKISTAN’S AUTOMOBILE INDUSTRY
The automobile industry was the fastest growing large-scale
manufacturing industry in 2009-10 as it grew by approximately 32
percent and also contributed US$ 3.6 billion to the GDP of Pakistan.
The sector is currently employing around 192,000 people.
221,174 vehicles were produced in Pakistan in the year 2011, an
increase of 8.7%, while the sales of new vehicle were 215,732 units.
There are only three major passenger car assemblers in the market
namely:
Pak Suzuki
Indus Motors and
Honda Atlas.
7. High end cars or 1,300cc automobiles dominated the Pakistani market yet
again as Toyota Corolla managed to be the most famous car in Pakistan.
Pak-Suzuki has an almost complete monopoly in the small car sub-segment.
Pak Suzuki, is the biggest local car assembler in Pakistan and it sold 79,993
units in 2011 capturing a market share of 53%.
A few reasons that have adversely affected Pakistan’s automobile industry
are:
Unstable economic and political situation.
Higher interest rates for leasing and financing.
Significant depreciation of Pak Rupee against Japanese Yen and US
Dollar.
High import tariff and increase in the prices of raw material.
8. ACCORDING TO PAMA
45000
41111
40000
35000
30000 Toyota Corolla
Suzuki Mehran
25000 24119 Suzuki Cultus
Suzuki Bolan
20000 Suzuki Alto
Suzuki Liana
15000 13311 Honda City
11428 11932 Honda Civic
10000 9121 Hyundai Santro
6365 6007 Daihatsu Coure
5000
470
0
2010-11
9. PAK SUZUKI: AN OVERVIEW
Pak Suzuki Motor Company Limited (PSMCL) was formed in August
1983 after a joint venture between Pakistan Automobile Corporation
Limited and Suzuki Motor Company, Japan.
The company’s existing plant is located at Bin Qasim and was
inaugurated in 1989 by the then Prime Minister of Pakistan Benazir
Bhutto.
This plant has a total area of 259,000m2 and the cost for building it
accounted up to Rs. 11.096 billion. This plant has a production
capacity of 150,000 units/ annum and works in double shifts.
10. MILESTONES ACHIEVED
1982:Suzuki FX was launched
1988:Pak Suzuki started manufacturing Suzuki Khyber
1992:Suzuki Margalla was launched
1997:Suzuki Baleno was introduced a replacement for Pak Suzuki
2000: Suzuki Cultus produced as a replacement of Suzuki Khyber
2001: Mehran was re-launched. Mehran, Bolan & Ravi were introduced
in CNG.
2006: Suzuki Liana was introduced
2010: Pak Suzuki started the production of Suzuki Swift
11. VISION & MISSION
Vision
To be Excellent All Around.
Mission
To provide automobile of international quality at competitive price.
To improve skills of valued employees by imparting training and inculcating in them
a sense of participation.
To achieve maximum indigenization and promote Pakistan’s automobile vending
industry.
To make valuable contribution to social development of Pakistan through
development of industry in general and automobile industry in particular.
12. DEMOGRAPHIC PROFILE & TARGET MARKET
OF PAK SUZUKI
Demographics Target Market
Age: 18 years and above
Gender: Male and Female
Family Size: 2-5 people
Social Status: Upper Middle Class, Middle Class
and Lower Middle Class
13. LIFESTYLE OF PAK SUZUKI OWNERS
Activities: Students, Business
purposes, Early Professional
career, Household purposes
Interests: Personal Use and Luxurious
lifestyle
20. PORTER’S MODEL OF COMPARISON
Threat Of Substitute
Unfavorable
Suppliers of Raw Material, and Buyers Bargaining Power
Components Threat Of Rivalry
Moderate Moderate Favorable
Threat Of New Entrants
Favorable
21. BCG MATRIX
High Low
Prioritize Divest
High
• BOLAN •SWIFT
MARKET GROWTH
Invest Liquidate
•MEHRAN
Low
•APV
•CULTUS
•LIANA
•ALTO
MARKET SHARE
23. SWOT ANALYSIS
S W
TRENGTHS EAKNESSES
• Less focus on the looks and
• Pioneer in Pakistan automobile design of cars
industry • Tough competition from
• Largest dealership network cheaper imported cars.
• Low price vehicles • None of the local Suzuki cars
• Highest market share offer airbags.
• A household name • Mehran, Cultus & Bolan are
• Availability of spare parts globally obsolete cars which Internal
• Reliable after-sales service are no longer produced or
• Good resale value sold in any other country.
factors
• Innovative & deep product line • Not many automatic
• Well managed & competitive staff transmission vehicles in the
• Most number of company fitted market.
O T
CNG cars.
PPORTUNITIES HREATS • Tough competitors like
Toyota & Honda.
• Increased demand for cars. • Smuggling of auto parts.
• Large market size to operate • High inflation rate.
in. • Imposition of heavy taxes.
• As the demand for CNG • Increase in fuel prices.
vehicles is on the rise in • Floods in Pakistan & External
Pakistan, their small size earthquake in Japan. factors
CNG cylinders save space. • Appreciation of Japanese
• The deteriorating transport yen against Pakistani Rupee.
system has awakened the • Sharp rise in international
need of owning personal prices of raw materials.
transport means. • Lack of skilled labor &
technology.
Positive Negative
24. PEST ANALYSIS
Political Analysis Economic Analysis
Tax Policy Economic Growth
Labor Law Interest Rate
Trade Restrictions Exchange Rate
Tariffs Inflation Rate
Political Stability
Technological
Social Analysis Analysis
Population Growth Rate R&D
Age Distribution Automation
Religion Technological Change
Education Innovation
Outsourcing
25. COMPETITIVE STRATEGIES & INDUSTRY POSITIONING
Over all low-cost provider strategy Broad differentiation strategy
•Tough competition • New product innovation
• Firm sets out to become the low cost •Technical superiority
producer in its industry. •Product quality & reliability
•Used by new comers to attract buyers. •Comprehensive customer service
•Example: Pak Suzuki. •Examples: Toyota & Honda.
Focused low cost strategy Focused differentiation strategy
•The focuser selects a segment or group of •Enough resources to cater the niche
segments in the industry. market.
•Tailors its strategy to serving them to the •Can defend against rivals through
exclusion of others. customer goodwill.
•In cost focus a firm seeks a cost •Competitors do not have the capability to
advantage in its target segment. match the skills needed to cater the niche
•Example: Adam Revo. market.
•No other rival concentrates on the same
segment
•Examples: Mercedes & BMW.
26. ACCORDING TO PAMA
24119
22513
25000
20000
13311
Daihatsu (Coure)
15000 11439 Suzuki (Mehran)
Suzuki ( Bolan)
10000
6007
5301
5000
0
Sold (2009-10) Sold (2010-11)
27. PAK SUZUKI VALUE CHAIN
Supply Chain Sales &
Management
Operations Distribution
Marketing
Service Profit Margin
Product R&D, Technology and System Development
Human Resource Management
General Administration
28. SUPPLY CHAIN MANAGEMENT
Pak Suzuki procures most of the raw material from Japan but some
items are also brought in from Korea and Thailand.
The mode of payment is through a Letter of Credit and the estimated
lead time required is 4 months.
The parts are shipped by Sea or Air and Port Qasim deals with the
handling of the cargo arriving from Japan, Korea and Thailand.
The annual demand is calculated by considering the inputs of all
department heads and then sent to the chairman for approval.
Back to Pak Suzuki Value Chain
29. OPERATIONS
Pak Suzuki works in an environmental friendly
environment.
Although the sales grew in the current year the
plant at Port Qasim still did not function at full
throttle.
The growth was seen at 52% for auto cars and 30%
for the 2 wheelers.
79,138 units of cars were sold and 14,659 units of
motorcycles were sold.
Back to Pak Suzuki Value Chain
30. DISTRIBUTION
Pak Suzuki has the largest distribution network in Pakistan.
There are currently 74 dealers of Pak Suzuki which are
spread all over the cities of Pakistan.
The dealers are strategically placed all across the nation to
provide customer service at the premium quality.
Back to Pak Suzuki Value Chain
31. SALES & MARKETING
Pak Suzuki has a very strong distribution network all across Pakistan
which makes the availability of spare parts very easy for customer.
This has been one of the reasons for the market share of Pak Suzuki to
reach up to 53% in 2011.
The exports of Suzuki Ravi Pickup to Bangladesh are gradually
increasing.
During the year five hundred and fifty one (551) units of Suzuki Ravi
Pickup and six units of Suzuki Liana worth Rs.190 million were exported.
Last year three hundred and sixty units (360) of Suzuki Ravi Pickup
worth Rs.117million were exported.
Five units of Suzuki Ravi Pickup and Suzuki Bolan worth Rs.2 million
were exported to Suzuki Motor Corporation Japan as well during the
year.
Back to Pak Suzuki Value Chain
32. SERVICE
There are around 87 dealer workshops which gives state of the art
expertise and mechanical manpower.
Pak Suzuki offers a warranty of 2 years and 40,000 km whichever
comes first.
Free services for the Pak Suzuki customer are given for the first 1.5
months or 1500 kilometers.
Back to Pak Suzuki Value Chain
33. PRODUCT R&D, TECHNOLOGY AND SYSTEM
DEVELOPMENT
Pak Suzuki is run by state of the art technology along with technical support
in terms of tools and equipments. Some of the technological equipments Pak
Suzuki has are:
Engine Analyzer
Smart Diagnostic Tester
Wheel Balancing
Wheel Aligner
A/C Equipments
CO tester
Paint Booth
Chassis Aligner
Car Wash
Back to Pak Suzuki Value Chain
34. HUMAN RESOURCE MANAGEMENT
The relationship between the management of Pak Suzuki and its
employees has always been a healthy one.
Multiple training sessions are also held time to time in order to train
the employees.
The multiple forms of training held at Pak Suzuki are:
In House Workshops
Simulation Training
Effective Lectures
Visual Based Training
Outside Training
Back to Pak Suzuki Value Chain
35. GENERAL ADMINISTRATION
BOARD OF DIRECTORS
Mr. Hirofumi Nagao Managing Director
& CEO
Mr. Satoshi Ina Deputy Managing Director
Mr. Hidekazu Terada Director
Mr. Jamil Ahmed Director
Mr. Mumtaz Ahmed Shaikh Director
Mr. Kenichi Ayukawa Director
Mr. Wazir Ali Khoja Director
CFO & COMPANY SECRETARY
Mr. Abdul Hamid Bhombal
Back to Pak Suzuki Value Chain
36. CSR AT PAK SUZUKI
Pak Suzuki Motors works hard to maintaining a good working environment.
Some of the CSR activities they have been involved in are:
In 2010, there were 125 relief tents setup by Pak Suzuki as well as a few
Suzuki Ravi pickups provided which were helpful in transporting people to
safe places and distribution of commodities in Sindh.
Rs. 15 million collected by Pak Suzuki employees who gave away their one
day’s salary for the needy which helped in the setting up of camps and relief
centers.
Pak Suzuki also runs a yearly internship program where bright
undergraduates are invited at Pak Suzuki
During the summer vacations of 2011, the children of the direct and the
indirect employees of Pak Suzuki were called upon to attend a “Computer
Literacy Program”.
In May 2011, Pak Suzuki donated Rs.20 million to the Japanese government
after the earthquake and tsunami that devastated the lives of millions in
Japan.
39. SALES INCOME
45,000,000 700,000
40,000,000 600,000
35,000,000
500,000
30,000,000 2008
2008
400,000
25,000,000 2009
2009
20,000,000 300,000
2010 2010
15,000,000 200,000
10,000,000 100,000
5,000,000
0
0
Net Income
Net Sales
Ratio 2008 2009 2010 Ratio 2008 2009 2010
Net Sales 39,669,730 26,234,061 42,642,762 Net Income 624,785 255,219 211,143
40. ACTIVITY RATIO Accounting ratios that measure a
firm's ability to convert different
35.0 accounts within their balance sheets
30.0 into cash or sales.
25.0
20.0
15.0
10.0
2008
5.0
0.0 2009
2010
Activity Ratios 2008 2009 2010
Stock Turn Over 5.1 3.7 4.8
Payable Turnover 25.0 11.5 12.70
Account Receivable Turnover in days 2.6 5.2 2.06
Payable Turnover in days 14.6 31.6 28.74
Fixed Asset Turnover 7.7 5.0 10.09
Total Asset Turnover 2.3 1.5 2.22
41. LIQUIDITY RATIO A class of financial metrics that is used to
determine a company's ability to pay off
its short-terms debts obligations.
4.50
4.00
3.50
3.00 2008
2.50
2.00 2009
1.50 2010
1.00
0.50
0.00
Current Ratio Quick Ratio
Activity Ratios 2008 2009 2010
Current Ratio 4.44 3.74 3.01
Quick Ratio 0.94 1.07 0.61
42. SOLVENCY RATIO One of many ratios used to measure a
company's ability to meet long-term
obligations.
40.00
35.00
30.00
25.00 2008
20.00 2009
15.00 2010
10.00
5.00
0.00
Interest Coverage Ratio Financial Leverage
Activity Ratios 2008 2009 2010
Interest Coverage Ratio 19.56 35.05 32.29
Financial Leverage 1.20 1.23 1.33
43. PROFITABILITY RATIO A class of financial metrics that are
used to assess a business's ability to
4.50% generate earnings as compared to its
4.00% expenses and other relevant costs
3.50%
3.00% incurred during a specific period of
2.50%
2.00%
time.
1.50%
1.00% 2008
0.50% 2009
0.00% 2010
Ratios 2008 2009 2010
Gross profit margin ratio 1.48% 2.17% 2.35%
Operating profit margin ratio 1.02% 0.54% 0.79%
Net profit margin ratio 1.57% 0.97% 0.50%
Return on equity 4.41% 1.78% 1.46%
Return on sales 1.57% 0.97% 0.50%
Return on assets 3.68% 1.45% 1.10%
44. MARKET RATIO A ratio used to find the value of a company
by comparing the book value of a firm to its
market value.
8.00
7.00
6.00
5.00
2008
4.00
2009
3.00
2010
2.00
1.00
0.00
Divident Per Share Divident Pay Out Earning Per Share
Ratio
Ratios 2008 2009 2010
Dividend Per Share 4.98 0.99 0.50
Dividend Pay Out Ratio 0.66 0.32 0.19
Earning Per Share 7.59 3.10 2.57
46. RESEARCH BASED ON CUSTOMER LOYALTY
AND SATISFACTION
The sampling technique we chose was the
convenience based sampling.
According to the sample there were 100
respondents out of which 60 people responded
which made the response rate around 60%.
The demographics of the population were families
consisting of maximum 5 people and students.
47. WHICH OF THESE FACTORS AFFECT YOUR
SATISFACTION TOWARDS SUZUKI CARS
Which of these factors affect your satisfaction towards Suzuki Cars
Frequency Percent Valid Percent Cumulative Percent
Valid Features 10 16.7 16.7 16.7
Low Maintenance Cost 13 21.7 21.7 38.3
Comfort 10 16.7 16.7 55
Style 14 23.3 23.3 78.3
After Sales Service 13 21.7 21.7 100
Total 60 100 100
48. WHAT IS YOUR LEVEL OF SATISFACTION
TOWARDS SUZUKI CARS?
What is your level of satisfaction towards Suzuki cars?
Frequency Percent Valid Percent Cumulative Percent
Valid Highly Satisfied 12 20 20 20
Satisfied 14 23.3 23.3 43.3
Neutral 14 23.3 23.3 66.7
Dissatisfied 7 11.7 11.7 78.3
Highly Dissatisfied 13 21.7 21.7 100
Total 60 100 100
49. WHAT IS YOUR OPINION TOWARDS THE FUEL
CONSUMPTION OF YOUR SUZUKI CAR
What is your opinion towards the fuel consumption of your Suzuki car
Frequency Percent Valid Percent Cumulative Percent
Valid Highly Satisfied 16 26.7 26.7 26.7
Satisfied 15 25 25 51.7
Neutral 9 15 15 66.7
Dissatisfied 11 18.3 18.3 85
Highly Dissatisfied 9 15 15 100
Total 60 100 100
50. HOW DO YOU RATE THE SAFETY FACTOR IN
SUZUKI CARS?
How do you rate the safety factor in Suzuki cars?
Frequency Percent Valid Percent Cumulative Percent
Valid Highly Satisfied 9 15 15 15
Satisfied 10 16.7 16.7 31.7
Neutral 14 23.3 23.3 55
Dissatisfied 21 35 35 90
Highly Dissatisfied 6 10 10 100
Total 60 100 100
51. ARE YOU SATISFIED WITH THE SPACE
AVAILABLE INSIDE YOUR SUZUKI CAR?
Are you satisfied with the space available inside your Suzuki car?
Frequency Percent Valid Percent Cumulative Percent
Valid Highly Satisfied 9 15 15 15
Satisfied 7 11.7 11.7 26.7
Neutral 10 16.7 16.7 43.3
Dissatisfied 18 30 30 73.3
Highly Dissatisfied 16 26.7 26.7 100
Total 60 100 100
52. WHAT IS YOUR PERCEPTION ABOUT SUZUKI
CARS?
What is your perception about Suzuki cars?
Frequency Percent Valid Percent Cumulative Percent
Valid Highly Satisfied 9 15 15 15
Satisfied 15 25 25 40
Neutral 12 20 20 60
Dissatisfied 11 18.3 18.3 78.3
Highly Dissatisfied 13 21.7 21.7 100
Total 60 100 100
53. WHERE WILL PAK SUZUKI STAND IN THE
COMING FUTURE
Despite of all the negatives of the economy and the
political situation in the country, Pak Suzuki
continues to be in the front position in the
automobile industry.
It has a market share of 53% which has increased
significantly from 48% last year which shows
considerable improvement through years.
The automobile industry is one of the major
contributors to the GDP of our nation.
The Government of Pakistan needs to provide
necessary the much needed support for the
expansion of Auto Industry.
