SUMMARY OF FINDINGS FROM INDUS MOTORS LTD

Mr. Zain Afzal is an Asst Marketing Manager working in Indus Motors for the
last 5 years with strong knowledge of the car manufacturing process along
with the product used in different components.

ABOUT THE COMPANY

Indus Motor Company Limited (IMC) incorporated in 1989 as a joint venture
company between the between the House of Habib (HOH), a local
conglomerate and Toyota Motor Corporation (TMC) and Toyota Tsusho
Corporation (TTC) of Japan. The company manufactures and markets Toyota
brand vehicles in Pakistan. The main product offerings include several
variants of the flagship Corolla in the passenger cars category, Hilux in
the light commercial vehicles segment and Fortuner in Sport Utility Vehicle
(SUV) segment. The Company also sells limited units of Daihatsu brand
vehicles.

The manufacturing facility and offices are located at a 105 acre site in Port
Qasim, Karachi, while the product is delivered to end customers nationwide
through a strong network of 39 independent 3S dealerships spread across
the country. In its 25 years history since inception, IMC has sold more than
500,000 CBU/CKD vehicles and has demonstrated an impressive growth, in
terms of volumetric increase from a modes beginning of 20 vehicles per day
production in 1993 to 220 units daily at present through the development of

human

talent

embracing

the

Toyota

Way

of

quality

and

lean

manufacturing. Over the years, IMC has made large scale investments in
enhancing its own capacity and in meeting customer requirements for new
products. Today, Corolla is the largest selling automotive brand model in
Pakistan and it also has the distinction of being #1 in Toyotas Asian market.

The company has played a major role in the development of the entire value
chain of the local auto industry and is proud to have contributed in poverty
alleviation at the grass root level by nurturing localization that in turn has
directly created thousands of job opportunities and transferred technology to
60 vendors supplying parts.

CONSUMPTION AND USE OF PVC

As for the parts made in PVC, we came to know the importance of PVC in the
manufacturing of cars. Currently PVC is used both in hard and soft forms in
manufacturing different parts for the cars. Furthermore, Indus Motors is not
making these parts themselves and are buying them locally as well as
internationally while assembling them in their manufacturing facility.

Regarding the use of the soft form PVC we found that it is majorly used in the
upholstery (seat cover, car cover &floors mats etc.) and electrical
components. The amount we got out of the survey is 30%-40% of the total

weight of the respective component. After thorough research on the specific

components mentioned above we found the following data.

Upholstery

Average 08 kegs per car

Electrical Components

Average 07kegs per car

==============================================
====
Total

Average 15 Kgs of PVC per car

Having this data in hand, we used the PAMA website to find the average
sales of the cars per year since the last 05 years. Kindly find the table below.
PASSENGER CARS
1300 and Above
cc
Honda Civic

Honda City

Suzuki Liana
Suzuki Swift

Pro
d.
Sal
e
Pro
d.
Sal
e
Pro
d.
Sal
e
Pro
d.

200910
5,6
48
5,9
08
7,8
52
8,2
12
9
00
1,0
25
2,5
78

201011
6,4
08
6,3
65
9,2
94
9,1
21
6
14
4
70
4,3
76

201112
5,3
96
4,9
77
7,0
89
7,1
42
3
34
4
50
7,1
28

201213
9,6
08
9,9
50
11,6
38
11,2
85
1
50
1
64
5,9
45

201415
10,0
20
9,9
33
13,5
85
13,7
41
1
44
1
61
5,0
47

Sal
e

2,3
53

Pro
Toyota Corolla

43,3
82

Sal

4,0
80
41,4
19

43,5

7,0
40
46,3
52

41,1

6,0
96

5,1
28

32,8
82

46,2

28,1
24

32,6

29,0

e
Sub-Total

10
11
07
08
87
Pro
60,3
62,1
66,2
60,2
56,9
d.
60
11
99
23
20
Sal
61,0
61,1
65,8
60,1
58,0
e
08
47
16
03
50

Pro
d.
Sal
e
Pro
d.
Sal
e
Pro
d.
Sal
e
Pro
d.
Sal
e

200910
12,4
53
12,6
58
10,6
65
10,7
94
2
12
2
44
23,3
30
23,6
96

201011
12,4
14
11,4
28
12,8
73
11,9
32

201112
13,6
00
13,6
93
15,2
88
16,2
88

201213
12,7
85
13,3
08

201011
6,2
80
6,0
07
25,9
35
24,1
19
14,3
59
13,3
11

201112
3,6
35
3,8
57
33,8
39
35,1
31
21,5
94
22,5
40

201213

201415

Pro
d.
Sal
e
Pro
d.
Sal
e
Pro
d.
Sal
e

200910
5,1
45
5,3
01
22,2
71
22,5
13
10,5
41
11,4
39

71

1000 cc
Suzuki Cultus

Suzuki Alto

Hyundai Santro

Sub-Total

800 cc & Below

1000cc
Daihatsu Cuore

Suzuki Mehran

Suzuki Bolan

201415
14,4
67
14,6
82
2,2
08
1,6
21
2
10
1
52
25,2
28,8
12,7
16,8
87
88
85
85
23,3
29,9
13,3
16,4
60
81
08
55

34,2
78

28,4
85

32,4
07

29,5
09

13,0
46

13,9
91

12,9
41

14,0
88

Sub-Total

Pro
37,9
46,5
59,0
47,3
42,4
d.
57
74
68
24
76
Sal
39,2
43,4
61,5
45,4
43,5
e
53
37
28
19
97

TOTAL CARS

Pro
121,6
133,9
154,2
120,3
116,2
d.
47
72
55
32
81
Sal
123,9
127,9
157,3
118,8
118,1
e
57
44
25
30
02

Average production per year as per the data above comes out to be 129,297
cars. Multiplying the average amount of PVC (soft grade) used in the cars i.e.
15 kg/car we came to the figure of approximately. Assuming that all the cars
manufactured in Pakistan are using the same technology and components
that are being manufactured by Indus Motors the current potential of PVC in
the automotive industry is approximately1940 Tons per year. The potential
mentioned here is the maximum we calculated based on the survey and the
research we conducted on the components of PVC.

MARKET STRUCTURE
As per the survey, we came to know that IMC have been buying their PVC
components locally as well as internationally. They are currently importing
the PVC parts from Thailand, Japan and Taiwan. Locally they mentioned
Auvitronics and Omer Jibran as their current source of purchasing PVC
components. The products they are importing arent available locally which is
why they are moving towards imported supplies from foreign suppliers.

According to our survey results the current market structure of Automotive

PVC vendors in Pakistan is highly organized (tax payers). Furthermore
according to the survey result the prospects of PVC product in automotive
industry are good.

PVC COMPOUND CUSTOMER EXPECTATIONS

Quality, Timely Deliveries & Availability is of prime importance to IMC
followed by price and technical expertise. As of today they gave mediocre
rating to their current suppliers showing their intention for better supplies.
Majorly IMC is facing issues of delayed supplies, inferior quality of PVC
products & law and order situation with Pakistani vendors.

ORDER SIZE, LEAD TIME & BUYING PRICE

The current order size in terms of kegs of PVC from IMC is in the range of
500-1000 kegs/order with a lead time of 15-30 days. Buying price for PVC
wasnt mentioned by the respondent in the survey since they arent buying
PVC in raw form.