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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

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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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