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Business Scope
Region Functions/Applications
EXTERNAL ANALYSIS
Users of luxury oriented cars seek High Class, Prestige, Safety and Pleasure drive in their cars. Executive people or the Elite Class people who belongs to the Upper-Upper class are the users of such cars.
Comfort Segment
Users in this segment wants comfort, pleasure drive and safety from their cars. Upper class who belongs to the middle management of the organization or business man prefers such cars.
The cars in this segment tend to provide fuel efficiency, low cost of maintenance and reasonable prices. Lower or Middle class families are the end users of these cars due to low cost of maintenance and high fuel efficiency
Imported Cars
Imported cars are highly efficient, durable, and highly comfortable and user can experience the real essence of Pleasure Drive. Families relating to Upper Middle Class or Upper Class are the end users of imported cars.
The sales in each segment have declined a bit after 2006-07 due to economic crises. Sale of imported cars has been declined drastically due to levying of heave import duties. If we take year 2005-06 as base year and consider its sales as 100% than we can get the following
results:
Sales for luxury segment in the year 2008-09 is decreased by 15.5 %. Sales for economical segment in the year 2008-09 is increased by 18%. Sales for comfort segment in the year 2008-09 is decreased by 18%. Sales for Imported segment in the year 2008-09 is decreased by 67%.
Although the unit sales have been decreased in the last two years but the Sales in value have shown a
hike. The prices of cars have increased much more as compared to the decline in the unit sales Unit sales as well as the Volume sales have been declined for Imported cars Unit demand have been declined drastically for imported cars
21 00 2 % 1 ,3 5 4 9 5 % 4 ,5 2 6 4 6 % 5 ,9 7 6 3 1 5% 1 ,6 5 7 6
21 01 5 % 1 ,1 5 5 1 6 % 4 ,3 5 9 3 8 % 6 ,4 2 1 9 1 8% 2 ,8 5 0 4
21 02 7 % 1 ,1 3 6 7 8 % 5 ,2 3 82 1 0% 6 ,6 1 7 4 2 0% 2 ,0 4 5 1
21 03 9 % 1 ,6 9 7 2 9 % 5 ,0 7 8 7 1 2% 7 ,7 8 5 5 2 2% 3 ,5 7 0 1
In the recent months some banks have resumed auto financing after seeing boom in demand. Slight improvement in law and order situation have boosted consumers confidence. Pak Suzuki Motor Company Limited is planning to roll out over 20,000 units in April-June this year
swelled to $315 million from $181 million in the corresponding period of last fiscal year.
Federal Board of Revenue (FBR) has proposed 10 to 20 per cent reduction on import duty for
completely knocked down (CKD) kits and five to 10 per cent duty cut on completely build-up units (CBU) in the budget
Distribution Structure
C pany om Pak Suzuki Indus Motors Honda Authorized D ealers 70 30 18
Indus Motors have a high Dealership network as compared to Honda As compared to Honda and Toyota, Pak Suzuki has one of the largest and finest
Distribution Structure
C pany om Pak Suzuki Indus Motors Honda Authorized Dealers(% ) 100% 85% 90% Unauthorized Dealers (% ) 0% 15% 10%
Honda is selling 10% cars through unauthorized dealer network whereas Indus
Inr ae cesd
Fe Cs ul ot
Th r s lt in is eu s s if in d mn ht g e ad o c nu est f e ef ie t f o s mr o u l f ic n v h le e ic s Pr e o imot dc r ic s f p r e as r ah d ec e c mei iv o p tt e le e vl t ee ys if in hr b ht g c so e ut mr d mn e ad f o lo a c r t r m c l as o imot dc r p r e as S c le s g n f a c g ine ain a d in nin h v sat da a ,itw ae t r e gin ill inr ae t e e a df r ce s h d mn o a t mb s uo o ile Hig t x to a d h aai n n inr ain ce s g ineet trs lo e t ed mn wr h e a d a t mb s uo o ile ee vr r t sw ae ill fr o
CrF ac g a i ni / n n Lai g es n
Market Share
during the year 2009 Pak Suzuki has well maintained its market share even in the
such period of declining sales, the market share have been low as compared to other competitors.
INTERNAL ANALYSIS
SWOT Analysis
Strengths
Highest market share in the industry. High resale value Highly innovative and deep product line Easy and cheap availability of the spare parts Strong Research & Development
Weaknesses
No penetration in the large car market (greater than 1300cc) Very limited Distribution Channel in the sub urban areas
SWOT Analysis
Opportunities
Ever increasing prices of fuel and rising inflation resulting in high cost of maintenance have increased the demand of low cost and fuel efficient cars. opportunity to enter into the luxury segment and comfort segment. Foreign investment in the automobile industry Sales of imported used cars boost up Smuggling of Auto Parts is another threat to the local manufacturers The double digit inflation rate in 2009 is expected to further dampen the purchasing power of the customer
Threats
CONFRONTATION MATRIX
Strength Opportunities
Pak Suzuki Motors can use its strong brand image to build strategic alliances with local as well as foreign vendors. By using its strong R&D, Pak Suzuki Motors can enter into newer segments. Since Suzuki does not entertain customers that seek Luxury and Comfort in their products other than being economical, Suzuki may lose customers who are brand loyal with Suzuki but are now searching for Luxury Cars.
Weakness Opportunities
CONFRONTATION MATRIX
Strength Threats
Due to Suzukis low priced automobiles, fuel efficiency and low cost of maintenance, it have an edge over imported cars in the local market
Weakness - Threats
Since Suzuki does not entertain customers in this segment, foreign car manufacturers have an edge over the Pak Suzuki Motors in this area.
SERVICE RELATED
1. After Sales service 2. M aintenance Cost
20%
10 10 8 10 7 4 7 6
TOTAL
100%
80%
63%
61%
VISION STATEMENT
VISION STATEMENT
To become a leader in producing customer friendly, innovative and over all low cost automobiles so as to gain customer loyalty by satisfying customer at the highest level
MISSION STATEMENT
To provide automobile of international quality at
BUSINESS OBJECTIVES
Increase market share to 55% during the next 5 years Increase capacity utilization to around 85% during the
next 5 years
Increase dealership network to 100 across Pakistan
the business thereby extending the existing product line during the next 5 years
Reduce the cost of sales by 2% during the next 5 years
KEY ISSUES
Economic Downturn Limited investment in high technology equipment
and machinery
Lack of diversified products Increase in manufacturing cost
Is u 2 se
L it d im e in e tm n in vs et h h ig te h o g c n lo y e u mn q ip e t
Is u 3 se
Lc o ak f d e ifie iv rs d p dc ro u ts
Is u 4 se
In re s in c ae m n fa tu g a u c rin cs ot
Is u N m se a e
+ +
+ + + + + + + + + + + + + + +
++ + + + + +
+ ++ + + + + + +
+ +
T c n lo y eh o g
++ +
P n &E u m n la t q ip e t
+ +
Strategy where they provide low cost automobiles along with fuel efficiency and low cost of maintenance
Suzuki also differentiates its product in particular segment to capture
Page Increasing the outlets by 30% across the No. 11 Pakistan in the next 5 years Page Be more innovative in creating high fuel No. 13 efficient cars so as to capture the entire Economical segment of the industry
Page Suzuki will play on its strengths like Fuel No. 13 Efficiency, low cost of maintenance and affordable prices so as to have an edge over imported cars.
SWOT Analysis
Page Enter into other segments of the business by No. 22 launching cars like Liana and Swift
SWOT Analysis
Page Increase production capacity to 85% in the No. 22 next five years so as to curtail the increasing demand of the customers
Page Allocation of funds and proper research before No. 22 the launch of products Page Well spend and well plan promotional
Cost Analysis
Key Issues
Page Good amount of investment in technological No. 32 equipment so as to reduce the cost of the product and bring innovation in the vale chain