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Acknowledgement
Read: In the name of the Lord who create man from a clot. Read: And the Lord is the most Bounteous, Who taught by the pen, Teach man that which he knew not - (Al-Alaq : verses 1-5). Prayer about increase in knowledge:My Lord! Increase me in knowledge (Ta-ha: verse 114).
We would like to thank Allah Almighty for giving us the strength to complete the project in the best possible way and for all His blessing, for helping us in hours of need and for giving us the courage and motivation. We would also like to thank for respected teacher Mr. Arif Vaseer, who supported us and who gave us the courage of facing the practical life and without their help and guidance we would not be able to complete this report. Their assistance has been an invaluable source for the preparing this report and their corporation is highly appreciated.
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Over View
Auto market is one of the largest segments in world trade. Changing models, improving fuel efficiency, cutting costs and enhancing user comfort without compromising quality are the most important challenges of the auto industry in a fast globalizing world. The first phase of automotive assembling in Pakistan started in 1950 with Bed Ford truck followed by Ford Prefect, Ford Cortina and Dodge Dart. The indigenized parts in these vehicles did not exceed 20% with only exception of Bed Ford trucks with a deletion level of 80%. By the end of 70s practically all automobile assembling in Pakistan ceased. The second phase of Automobile assembly started in 1983 with the introduction of FX800 CC Suzuki Car. In 1989 Pak. Suzuki changed the Model of FX 800 CC withMehran 800CC. Pak Suzuki thereafter in 1992 introduced Khyber 1000 CC and 1300CC Margalla but the indigenization levels from 1983 to 1995 were not significant(i.e. Mehran 30%, Khyber 20%, and Margalla, 15%).In 1993, Indus Motors Company Ltd., Karachi introduced Toyota Corolla. Honda Atlascars (Pak) Ltd Lahore in 1994 introduced Honda Civic having 1300CC engine capacity. Indus Motors, Dewan Farooq Motors and Pak Suzuki introduced smaller Cars i.e. Cuore, Cultus and Santro of engine capacities 850 cc, 1000 cc respectively in 2000. This was known as era of competitiveness. Up to 1995, the deletion cell of MOI&Pwas formulating and monitoring the deletion programs. The industry specific deletion programs were formulated to specify local content requirements for cars, motorcycles, Buses and Trucks Tractors etc. The deletion policy finalized in 1996 has the following features: Industry Specific Deletion program. No roll back from achieved Deletion Levels. Even handled Tariff Protection at all levels of processing. The deletion levels were finalized by the sub-committees for cars, LCVs, Motorcycles and tractors etc., constituted by indigenization committee of EDB on the basis of technology levels prevalent in the engineering industry of Pakistan. The Industry specific deletion program (ISDP) books were published and distributed amongst the stakeholders, which resulted in a significant improvement in indigenization
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About Companies
(Pakistani Assembled)
Toyota Motors:
In Pakistan, the 10th generation of Corolla was launched in August 2008 with 4 trim levels: XLi, GLi, Corolla Altis and Corolla Diesel. The facelift version was launched in April 2011.The XLi is offered with Toyota's 85 hp, 1.3L 2NZ-FE engine. Pakistan was the only market to use the 2NZ-FE in the Corolla. This model does not have airbags, ABS or power windows. It is only offered in two colours, black and white.The GLi is offered with the same 1.3L engine unit as the XLi but it comes fully loaded with ABS, and power windows. No airbags are offered on this model. Metallic colours are available in the GLi.The Corolla diesel has 2 trim levels, the simple Corolla 2.0D and the Corolla 2.0D Saloon.The Corolla 2.0D comes equipped with Toyota's 1989 2C engine which produces 74 hp. The model does not have airbags, ABS or power windows. It is only offered in two colours, black and white.The Corolla 2.0D Saloon has the same engine unit as the Corolla 2.0D. The model is only available with a 5-speed manual. The 2.0D Saloon comes equipped with alloy rims, side skirts, optitron speedometer, wooden inserts on the interior and a single driver side airbag. Optional extra on the model is the sunroof.The facelift for the Corolla was launched on 11 April 2011. Initially only the XLi and GLi trims are available, with modifications to the front and rear lights and bumper, along with a revised interior color scheme. The 1.8L Corolla Altis with 1ZZ-FE engine has been suspended. Replacing it will be the 1.6L Corolla Altis with the 1ZR-FE engine producing 124 bhp. The Altis is expected to be launched in May. The Altis is expected to come equipped standard with side skirts, wooden inserts in the interior, optitron speedometer, 5-spoke alloy rims, fog lamps, power windows, power seats, ABS with EBD, driver side SRS airbag and a 6 speed (forward) manual transmission. Optional on the Altis will be a 4 speed super ECT automatic transmission and sunroof. The GLi will also be offered with a 4 speed super ECT automatic transmission and the 1.6L 1ZR-FE engine, the same on the Altis. This version of the GLi will be the same as the 1.3L GLi, albeit with the 1.6L engine, optitron speedometer and the 4 speed ECT automatic transmission, hence making it very similar to the Altis, save for the alloy rims, side skirts and the wooden inserts in the interior.
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Suzuki FX
Suzuki Mehran
Suzuki ALTO
Suzuki CULTUS
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About Cars
(Japan Assembled)
Toyota
Toyota Motor Corporation (TMC), is a Japanese multinationalautomaker. Toyota is the eleventh largest company in the world by revenue. In July 2012 the company reported that it had manufactured its 200 millionth vehicle. Toyota Motor, among the world's largest automotive manufacturers by auto sales designs and manufactures a diverse product line-up that ranges from subcompacts to luxury and sports vehicles to SUVs, trucks, minivans, and buses. Its vehicles are produced either with combustion or hybrid engines, as with the Prius. Toyota makes automotive parts for its own use and for sale to others. Popular models include the Camry, Corolla, Land Cruiser, and luxury Lexus line, as well as the Tundra truck. Historical timeline
1867 Birth of Sakichi Toyoda. 1924 Sakichi Toyoda invents Toyoda Model G Automatic Loom. 1929 Automatic-loom patent is sold to a British company. 1930 Kiichiro Toyoda begins research on small gasoline-powered engine. 1933 Automobile Department is established at Toyoda Automatic Loom Works, Ltd. 1935 The Toyoda precepts are compiled. 1936 The AA Sedan is completed. 1937 Toyota Motor Co., Ltd. is established. 1938 Honsha Plant begins production 1950 Company faces a financial crisis; Toyota Motor Sales Co., Ltd. is established. 1951 Suggestion System begins. 1955 The Toyopet Crown, Toyopet Master and Crown Deluxe are launched. The first prototypes of the Crown are exported to the United States; Toyota Motor Sales 1957 U.S.A., Inc. is established. 1959 Motomachi Plant begins production. 1962 Joint Declaration of Labor and Management is signed. 1965 Toyota wins the Deming Application Prize for quality control. 1966 The Corolla is launched; business partnership with Hino Motors Ltd. begins. 1967 Business partnership with Daihatsu Motor Co., Ltd. begins. 1974 Toyota Foundation is established. 1975 The prefabricated housing business begins. 1982 Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. are merged into Toyota Motor Supervisor: Mr. Arif Vaseer Page 6
Suzuki
Suzuki Motor Corporation is a Japanese multinational corporation. specializes in manufacturing compact automobiles and 4x4 vehicles, a full range of motorcycles, all-terrain vehicles (ATVs), outboard marine engines, wheelchairs and a variety of other small internal combustion engines. Suzuki is Japan's 4th largest automobile manufacturer after Toyota, Nissan and Honda, the 9th largest automobile manufacturer in the world by production volume Historical timeline
1909: Suzuki Loom Works founded in Hamamatsu, Shizuoka Prefecture, by Mr. Michio Suzuki. 1920: Reorganized, incorporated, and capitalized at 500,000 yen as Suzuki Loom Manufacturing Co. with Michio Suzuki as president. 1952: "Power Free" motorized bicycle marketed.[8] 1954: Company name changed to Suzuki Motor Co., Ltd. 1955: Lightweight car Suzuki Suzulight (360 cc, 2-stroke) front wheel drive, marketed helping to usher in Japan's light-weight car age. 1961: Suzuki Loom Manufacturing Co. established by separating the loom machine division from the motor works and lightweight truck "SuzulightCarry" marketed. 1962: Suzuki won the 50 cc class championship at the Isle of Man TT 1963: U.S. Suzuki Motor Corp., a direct sales subsidiary, opened in Los Angeles. Page 7
1965: "D55" (5.5 hp, 2-stroke) outboard motor marketed and makes early inroads and Fronte 800 marketed. 1967: Thai Suzuki Motor Co., Ltd. established as a local assembly plant. 1968: Carry full-cab van marketed. 1970: T500 (TT Isle of Man) Frank Whiteway 1970: LJ-Series (Jimny) 44 marketed. 1971: Ts185 Enduro marketed. 1971: GT750 motorcycle marketed. 1973: Suzuki Canada Ltd., opened in Ontario, Canada. 1974: P.T. Suzuki Indonesia Manufacturing established in Jakarta, Indonesia, entry into medical equipment field by marketing the Suzuki Motor Chair Z600 motorized wheelchair, expansion into the housing field initiated with Suzuki Home marketing two models of prefab "Mini-House" and three types of storage sheds. 1975: Antonio Suzuki Corp., a joint venture for knockdown production and sales, established in Manila, the Philippines. 1976: GS-Series motorcycles marketed. 1977: LJ80 44 vehicle marketed and exports of GS1000H motorcycle began. 1979: Alto marketed. 1979: SC100 marketed in the UK. 1980: Suzuki Australia Pty. Ltd. established in Sydney, Australia and entry into general purpose engine field by marketing three electric power generator models. 1981: Business ties with General Motors (U.S.) and Isuzu Motors, Ltd.(Japan) signed. 1982: 44 production began at PAK Suzuki Motor Co., Ltd. in Karachi, Pakistan and won maker championship for 7th consecutive year at the World Road Race Grand Prix 500. 1982: SC100 Discontinued in favour of Alto. 1983: Enters into a partnership with MarutiUdyog Ltd. to produce cars in India. 1983: Cultus/Swift 1.0-liter passenger car marketed and 44 production started at MarutiUdyog Ltd. in Gurgaon, Haryana, India. 1984: Suzuki New Zealand Ltd. established in Wanganui, New Zealand and began export of Chevrolet Sprint to the United States. Car production technical assistance contract signed with China National Aerotechnology Import & Export Beijing Corporation. Operation of Suzuki Motor GmbH Deutschland began in Heppenheim, Germany. 1985: SUZUKI of AMERICA AUTOMOTIVE CORP. established with the introduction of the Samurai, and the GSX-R750 motorcycle with an oil-cooled engine marketed and scooter production started at Avello S.A. of Spain. Agreement with Santana Motors to produce Suzuki cars in their Linares factory in Andalusia, Spain. 1986: American Suzuki Motor Corp. is formed merging U.S. Suzuki Motor Corp and Suzuki of America Automotive Corp.
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1987: Cultus/Swift production began in Colombia and total aggregate car exports reached 2 million units. 1988: Escudo/Vitara 44 marketed and total aggregate car production reached 10 million units.. 1989: CAMI Automotive Inc. established and began operation in Ontario, Canada. Swift GT/GLX and Sidekick sales begin in the United States. 1990: Corporate name changed to Suzuki Motor Corporation. 1991: Car production started in Korea through technical ties with Daewoo Shipbuilding & Heavy Machinery Ltd and Cappuccino 2-seater marketed. 1993: Passenger car production/sales began at Suzuki Egypt S.A.E., opening ceremony for new car production plant held at Magyar Suzuki Corp. in Esztergom, Hungary and Wagon R passenger car marketed. 1994: MarutiUdyog Ltd. of India total aggregate car production reached 1 million units. 1995: Total aggregate motorcycle export reached 20 million units 1996: Start of production in Vietnam (Motorcycles and automobiles) 1997: Achieved 10 million cumulative automobile sales for overseas market and 4strokeoutboard motors win the Innovation Award at The International Marine Trade Exhibit and Conference (IMTEC) in Chicago. 1998: Suzuki and General Motors form strategic alliance and ChongqingChang'an Suzuki Automobile Co., Ltd. received official approval from the Chinese government for production of passenger cars. 1999: Aggregate motorcycle production reaches 40 million units and JiangxiChanghe Suzuki Automobile Co., Ltd. receives official approval from the Chinese government for production of commercial vehicles. 2000: The company commemorates the 80th anniversary, aggregate car production at Kosai Plant reaches 10 million units and Suzuki production starts at General Motors de Argentina S.A. 2001: Aggregate Launch of Suzuki Liana/Aerio. worldwide sales of Jimny/SJ reaches 2 million units, production of Alto reaches 4 million units and Suzuki achieves "ZeroLevel" target of landfill waste 2002: Achieved 30 million cumulative automobile sales for worldwide market and America's No.1 warranty: 100,000/7-year powertrain limited warranty. 2003: Suzuki is No.1 in Kei car sales for the 30th consecutive year and Twin, the first hybridKei car in Japan, marketed. 2004: Aggregate domestic automobile sales reach 15 million units. 2005: Swift was awarded the 2006 RJC Car of the Year. 2006: New XL7 is marketed particularly to the North American market; and GM divested, selling 92.36 million shares and reducing their stake to 3%. 2008: GM divested its remaining 3% stake in Suzuki.
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2009: Suzuki introduces its first production pickup truck called the Equator. Volkswagen AG and Suzuki reach a common understanding to establish a close long-term strategic partnership. o November: Suzuki built a new 650,000 sq.m. factory in Eastern Seaboard Industrial Estate in Rayong province, Thailand, that have ground-braking in November 2009, the 20 billion yen investment for eco-car that production are start from March 2012. 2010: Volkswagen AG completed the purchase of 19.9% of Suzuki's outstanding shares. 2011: On 4 July Suzuki Motor chairman will come to Indonesia to announce Indonesia as regional production base with investment up to $800 million over the next few years. 2012: o January: Suzuki announces plans to build a new engine factory as the third factory in Indonesia to fulfill the fast-growing Southeast Asian market. On a 1.3 million square-metre site in an industrial park outside Jakarta, Suzuki has spent 10 billion yen with the potential to reach 30 billion yen. o March: Suzuki Swift (Third Generation), a new age of eco-car, begins production in a new factory based in Rayong province, Thailand which Suzuki invested 20 billion yen in 2009 targeting its compact car production. o November: American Suzuki Motor Corp. files for Chapter 11 bankruptcy protection. Owing to its focus on small cars, a strong yen and stringent US safety regulations which have hurt growth, Suzuki Motors announces it will discontinue building autos for the US market and focus instead on motorcycles, ATVs and marine equipment. U.S. sales had peaked in 2007 but had dropped to a quarter of that by 2011.
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Customer Analysis
Customer analysis is a process by which data from customer behavior is used to help make key business decisions via market segmentation and predictive analytics. This information is used by businesses for direct marketing, site selection, and customer relationship management. Marketing provides services in order to satisfy customers. With that in mind, the productive system is considered from its beginning at the production level, to the end of the cycle at the consumer. Customer analysis is playing a very important role in the prediction of customer behavior today and takes place among social sciences.
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Competitors Analysis
Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats. Profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment.Competitor analysis is an essential component of corporate strategy.
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Strategic Marketing - Project o What are their sales, shares and profits?
Pakistan has few multinational auto manufacturers and assemblers such as world-renowned brands Suzuki, Toyota and Honda, but the approval by the ministry of finance to import reconditioned cars in the budget 2004-05 after about a decade has put a new life in the business of small car dealers.
Reason: The sales of Suzuki is much better then Honda and Toyota. Because the spare parts of Suzuki is much cheaper then Toyota and Honda. So mostly people is price continues and they like Suzuki. So the sale is Suzuki is good. And the market value is high.
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Product Cars (nos.) 2 wheelers Investment (Billion) Contribution to GDP (%) Contribution to manufacturing sector (%) Direct Employment Gross sales turn over (Billion)
Reason: Future of Pakistan automobile industry is getting brighter as we can see in table that number of cars to be consumed is increasing in 2012. It will contribute in increasing Pakistan gross domestic product, increase employment in Pakistan.
Weaknesses:
The problems in Japan assembled cars are that its parts and maintenance is expensive as compared to local assembled cars. Reason: The reason is parts are not easily available in market. Pakistan assembled cars maintenance, spare parts, mechanics, are easily accessible to Pakistan customers because of Pakistani car dealer have strength to capture and target their customers easily. Pakistani assembledcars maintenance, spare parts, mechanics are cheaply available as compared to Japanese assembled car thats why it is weakness of Japanese firm to capture market and easily deal with customers. Supervisor: Mr. Arif Vaseer Page 15
Market Analysis
A market analysis studies the attractiveness and the dynamics of a special market within a special industry. It is part of the industry analysis and this in turn of the global environmental analysis. Through all of these analyses the opportunities, strengths, weaknesses and threats of a company can be identified.
o What are the factors reducing profitability in the market, entry and exit barriers, growth projections, cost structures and profitability prospects?
In Pakistan following factors are reducing profitability in the market, entry and exit barriers, growth projections, cost structures and profitability prospects Political Factor: Stability of governments. This may affect the future conditions in a country. Taxation policies. Economical Factor: The population figures and automobile buying capacity of people. Level of economic activity that affects need for commercial use of automobiles Socio cultural Factor: Lifestyle and preferences of people that impact their choice of types of automobiles. Social norms that impact the decision to own and use automobiles versus other means of transport. Technological Factor: Technology relating to automobile designs Supervisor: Mr. Arif Vaseer Page 16
Technology of automobile manufacture Technological developments that may increase or decrease use of automobiles
Environmental (Physical/Geographic) Factor: Physical conditions effecting ability to use automobiles of different types. This will also include state infrastructure such as roads for driving vehicles. Legal Factor: Legal provision relating to environmental population by automobiles. Legal provisions relating to safety measures.
Reason: These factors are unavoidable by Pakistani firms due to the intense struggle and competition faced by car companies as they try to deal with the need to tackle consumers demand. These factors are not faced by Japanese firms.
o What are the alternative distribution channels and their relative strengths?
The distribution channel moves goods and services from producers to consumers. It overcomes the major time, place, and possession gaps that separate goods and services from those who would use them.Each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer is a channel level. Because the producer and the final consumer both perform some work, they are part of every channel. We use the number of intermediary levels to indicate the length of a channel.
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Channel 1, direct marketing channel, has no intermediary levels. It consists of a company selling directly to consumers. Channel 2 contains one intermediary level. In consumer markets, this level is typically a retailer. Channel 3 contains two intermediary levels, a wholesaler and a retailer. Channel 4 contains three intermediary levels. Multi level Distribution Channel:The business marketer can use its own sales force to sell directly to business customers. It can also sell to industrial distributors, who in turn sell to business customers. It can sell through manufacturer's representatives or its own sales branches to business customers, or it can use these representatives and branches to sell through industrial distributors. The major relative strengths of Japan assembled cars are that they are reliable and good in quality because the major difference is quality difference that are the strengths of those cars.
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Environmental Analysis
Environmental Analysis study of all external factors that may affect a company or its marketing plan. Environmental analysis is a basic marketing function used to help marketers identify trends or outside forces that may impact upon the success or failure of a particular product.
Threats:
Political:
Political macro environment factors include things like tax policies, government-issued safety regulations, the availability of government contracts, and even shifts in the controlling political party. International laws, such as trade agreements and tariffs, may affect the supply and demand chains and available markets for many different companies as well.
Economic:
A market boom, recession, or growing inflation problem can all change the way an organization plans for the future and operates in the present. Economic factors are often difficult to assess, since economic forecasts and analyses vary widely between experts. Unemployment levels, comparative foreign exchange rates, and the state of the global economy can all help or hurt a business' ability to get needed components and maintain a stable profit.
Opportunities:
There is an opportunity in near future there is an increasing trend in Japan assembled cars.
Trends:
The Pakistan assembled cars demand may be declined due to expensive in price and low quality as compared to Japan assembled cars. A company cannot change or influence the environmental factors, but it does have fair amount of control over impact of environmental factors on its performance. This control is achieved by, understanding, anticipating, and responding wisely to environmental factors by management of internal factors.
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Strategic Marketing - Project o What are the major strategic uncertainties and information need areas?
In near future there is uncertainty that the demand of Pakistan assembled cars decreased and cars are exported from Japan. Reason: Pakistan is passing from many environmental uncertainties from which it can be concluded that pakistan assembled cars usage decreases as customers are unable to meet their needs from their current income as pakistan rupee value is decreasing day by day.
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Internal Analysis
The Internal Analysis of strengths and weaknesses focuses on internal factors that give an organization certain advantages and disadvantages in meeting the needs of its target market. Strengths refer to core competencies that give the firm an advantage in meeting the needs of its target markets. Any analysis of company strengths should be market oriented/customer focused because strengths are only meaningful when they assist the firm in meeting customer needs. Weaknesses refer to any limitations a company faces in developing or implementing a strategy. Weaknesses should also be examined from a customer perspective because customers often perceive weaknesses that a company cannot see.
o What are our costs, strategy, performance and points of differentiation, strengths, weaknesses, strategic problems and culture?
Strengths: The major strength of Pakistan assembled cars is that its maintenance and parts are less expensive as compared to Japan assembled cars. Weaknesses: The problems in Japan assembled cars are that its parts and maintenance is expensive as compared to local assembled cars. Reason: When Japanese car are imported their cost include importing tax as well and mechanics are not well aware and trained to repair Japanese assembled car. Pakistani car manufacturers get benefit from it and they make spare parts of their each and every so that they retain and satisfy their customers.
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Strategy Development
The development of a strategic plan is important part of a company's long-term success. This development process starts with analyzing the benefits, detractions, opportunities, and risks of the company, developing, and analyzing alternative financial strategies, formulating the purposes of strategic development, and designing methods of putting the chosen strategy into use. A company will assign a group of managers, business consultants, and experts to assist in the development.
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These factors increase competitive rivalry in Pakistan assembled automobile industries because of large no of firms (like Indus motor, dewaan farooque motors, sigma motors) are in Pakistan and competition is high. Industry is slowly growing because of importing of cars and cars are expensive.
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o Supplier End.
Supper take some commition on supply of car. In Pakistan Supplier normally take car from sea port and give it to forward.
o Forward End
Forward take cars from supplier and give to dealer. And dealer sells out these cars.
o Generic
Then dealer is a generic. They sell car and take profit on it. They normally has a big showrooms and they show the cars. They polish and clean the car daily. They add values on car. They also put some additional thing on car. For example alloy rim, music system. And then they charge high.
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Supply Chain
The marketing supply chain is the chain of suppliers that an organization relies on to produce marketing materials (print, promotional products and point of sale) to market their products and services.The marketing supply chain is often made up of numerous partners inside and outside of the organization such as brand managers, marketing services, agencies, direct sales teams, buyers, printers, fulfillment houses and many others all interconnected through often very complex relationships with little to no measurement in efficiency..
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References
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