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EXECUTIVE SUMMARY
The sole purpose of this report is to understand and analyze Strengths, Weakness,
Opportunities and Threats of Pak Suzuki Motor Company Limited. This project comprises of
SWOT analysis and Mix and Match strategy of Pak Suzuki motors. In terms of
information, authentic sources were used and officials were contacted which led us to collect
relevant and factual information regarding company.
A brief introduction and history of Pak Suzuki along with other relevant information and code
of conduct is covered. As an essential part, companys slogan, Vision and Mission are
mentioned. The operations and environment of company with its market impact has been duly
covered. The product line of Pak Suzuki and its market share are an important area which we
have covered. Report contains companys strengths, weaknesses, opportunities and threats
that are dominant in industry as well as in automobile market of Pakistan. Accomplishments
and milestones as well as Mix and Match strategies are precisely mentioned.
Product line of PSMC is explained with its features and market share which helped us to
understand innovation in their market offerings and competition between rivalries. The
findings also analyze the Economic Contribution, Sales Result, Net sales and Profit of Pak
Suzuki.
Precise contribution towards society by PSMC concludes the report followed by strategies to
be adopted and suggestions.
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TABLE OF CONTENTS
Introduction
Company Information
Code of conduct
SWOT ANALYSIS
Strength
Weakness
Opportunities
10
Threats
10
13
Milestone
14
Product Line
16
20
BCG Matrix
21
22
Conclusion
23
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INTRODUCTION
Pak Suzuki Motor Company (PSMCL) is a Pakistani subsidiary of Japanese automaker Suzuki
and was founded in September 1982 as a joint venture between the government of Pakistan and
Suzuki Motor Japan, formalizing the arrangement by which Awami Auto Ltd had produced the
Suzuki SS80 from 1982.
In Pakistan this company assembles and distributes cars manufactured by Suzuki. Pak Suzuki
has crowned the largest car assembler and created monopoly over small passenger cars in
Pakistans automobile industry.
When venture started, Suzuki initially owned 25% of the stock, and has progressively
increased their holding; it now owns 73.09%. Pak Suzuki is the market leader in Pakistan
Automobile Market by having more than 60% (December, 2011) of market share. Lacking
serious competition, Pak Suzuki has had a market share of more than 50% since its beginning.
Its launched Suzuki Swift has facilitated Pak Suzuki increase their market share in the 1,300 cc
segment. Companys future plan is to introduce Kizashi as a luxury car. Hopefully it will
compete rivalry existing in automobile industry.
Type
Public
Traded as
KSE: PSMC
Industry
Automotive
Founded
1983
Headquarters
Karachi, Pakistan
Products
Suzuki Automobiles
Parent
Slogan
Way of Life
Website
www.paksuzuki.com.pk
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COMPANY INFORMATION
Board of Directors
Chairman
Chief Executive
Dy. Managing Director
Director
Takashi Iwatsuki
Takanori Suzuki
Wazir Ali Khoja
Kinji Saito
Hirofumi Nagao
Tetsuya Fujioka
Toshihiro Suzuki
Director
Director
Director
Company Secretary
Abdul Nasir
Audit Committee
Wazir Ali Khoja
Kinji Saito
Takashi Iwatsuki
Member
Member
Chairman
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Chairman
Member
Member
Slogan
Way of life
Vision
To be recognized as a leading organization that values Customers needs and
provides motoring solutions with strong customer care.
Mission
CODE OF CONDUCT
Pak Suzuki Motor Company Limited conducts its business objectively, in an ethical and
proper manner, fully compliant with all applicable laws and regulations. The highest standards
of ethical business conduct and integrity are required of Pak Suzuki employees in the
performance of their official responsibilities. Employees will not engage in any conduct or
activity that may raise questions as to the Companys honesty, reputation or otherwise cause
embarrassment to the Company.
Pak Suzukis Code of Conduct outlines expected behaviors for all of its directors and
employees. Pak Suzuki requires its directors and employees to ensure that:
They will not engage in any activity that might create a conflict of interest between
them and/or the Company. In a situation where any such conflict of interest arises,
they will promptly disclose the same.
They will not take advantage of their position in Pak Suzuki to seek personal gains
through the inappropriate use of Pak Suzuki information or abuse their position.
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SWOT ANALYSIS
Strengths
Pak Suzuki motor has highest market shares due to low price vehicles as they are assembled
locally. The target segment of Pak Suzuki is middle class and growing middle class. The first
vehicle that most people buy in Pakistan is Suzuki. Advantages of buying Suzuki vehicle are
increase in demand, it is economical, it has good resale value, its spare parts are easily
available at cheaper rates and better fuel efficiency as compared to other vehicles.
Pak Suzuki motors has well defined and bureaucratic organizational structure with strong
management and skilled work force. Pak Suzuki motors also have well managed and highly
competitive staff.
Pak Suzuki motors have vast distribution channel with highly maintained supply chain and a
large market size to operate. Strong dealers network in all over Pakistan and reliable after
sales service are the strengths of Pak Suzuki.
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Pak Suzuki motors produces factory fitted CNG kits with space saving small size Italian CNG
cylinders along with efficient electronic fuel injection engines in their vehicles. It great
advantage for the customer to evade the hassle of custom fit local CNG cylinders. The built-in
CNG kit led to increase in demand for Suzuki vehicles in Pakistan. Pak Suzuki has produced
the highest number of company fitted CNG kit cars in Pakistan.
Pak Suzuki provides one window solution for all auto related problems under one roof. Pak
Suzuki along with selling vehicles also provides various other auto related services. These
services are Suzuki Finance, Suzuki Insurance, Suzuki Certified Used Cars and Suzuki
Extended Warranty.
Pak Suzuki gives loans on EMI (Easy Monthly Installments) as decided by the buyer for the
purchase of Suzuki vehicle. Suzuki Insurance service is an auto insurance arrangement for
Suzuki vehicles with unique features. Pak Suzuki also deals in sales of certified used cars and
also provides extended warranty on sold out vehicles. It is of great value for customers and of
great advantage to Pak Suzuki. Availability of all these services under authorized dealership
of Pak Suzuki all over Pakistan is strength and it resulted an increased in goodwill and brand
loyalty.
Weakness
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Pak Suzuki locally assembles vehicles at assembly plant using imported and locally
manufactured parts. The scarcity of locally available raw material and less production of
most parts at local level result in increase of costs. Over the years, Pak Suzuki has failed to
assemble and manufacture a complete vehicle at local plant.
Pak Suzuki deals their clients on the basis of project to project contract rather forming a
long term partnership. It does not ensure Pak Suzuki to provide vehicles to the same client
in future. In simple word, a client once gained is not secured for future deals.
Though Pak Suzuki has one of the largest distribution networks in Pakistan still it is not
able to form dealership network in sub urban and rural areas.
The focus of Pak Suzuki on simple, economical and user friendly vehicles has made it less
adaptable to latest and advanced technology. It is less focused on exterior design and more
on keeping simple like user friendly vehicles with less advanced and less complicated
handling. It has also not manufactured many automatic vehicles as compared to its
competitors. Suzuki vehicles also have a negative image of investing less on safety and
security of passengers.
There is also no international standard training institute of technical educational available
for its employees and it sends most of employees abroad to undergo certain trainings.
Pak Suzuki Pakistan has also failed at some level to forecast the external factors and has
underestimated the market. Suzuki launched SWIFT to counter imported Toyota
VITZ as VITZ was capturing the market of 1300 CC small cars. The Government has
a tax policy for automobiles on the basis of Horse Power. Though SWIFT countered the
demand for VITZ to some extent but it lost market comparing to Honda city 1298 CC. As
the tax on HONDA CITY was lower than Suzuki SWIFT due to less horse power the
consumer turned to Sedan Car, HONDA CITY. SWIFT faced a decline of 1% in its
sales the following year. Now Pak Suzuki is reducing the horse power of SWIFT to
counter the tax policy effect. Recently, Pak Suzuki has launched a luxury car KIZASHI
at an overwhelming price of 5 million PKR. Now the consumers in Pakistan have other
better options of buying Audi or BMW at a cheaper price as compared to it. Pak Suzuki
dealers predict it as a disaster and are pessimist about this new product.
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Opportunities
Localization
Automobile market in Pakistan is full of opportunities and Pak Suzuki has grabbed this
opportunity rightly. Though Pak Suzuki holds maximum share in the market still it has vast
areas to penetrate and explore.
The growing middle class and increasing purchasing power has led to an increase in demand
for cars. Pak Suzuki has an opportunity to grab this growing demand by positioning its
products in context to consumer demand.
Introduction and innovation in product line is a vast area to explore for Pak Suzuki. Producing
Luxury Vehicles such as KIZASHI has made Pak Suzuki to penetrate into market of Luxury
cars. Pak Suzuki is already producing Eco-Friendly vehicles and it will turn its few products
into Hybrid Cars. The ongoing adverse security situation in Pakistan has led to increase in
demand for security vehicles mostly used by security agencies. Pak Suzuki has an opportunity
to produce security Vehicles such as bullet proof vehicles, pickup trucks and armored
vehicles. Light and Heavy Duty vehicles such as trucks and buses have huge growth potential
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in Pakistan and introduction of such vehicles by Pak Suzuki will de be appreciated by vendors
and buyers.
In the past, Pak Suzuki has exported spare parts and assembled vehicles to Bangladesh. It has
an opportunity to explore other international markets and increase its exports to other
countries as well. The Companys long term plans inter-alia includes tapping of export
markets.
Pak Suzuki can liaison and sign partnership with public and privates sector institutions for
supply of vehicles. In the past, Pak Suzuki sold Cultus, Bolan and Ravi to government
institutions on large scale. Similarly, Pak Suzuki has also signed a contract with government
to provide 50,000 units of Suzuki Mehran and Suzuki Bolan for Apna Rozgaar Yellow Cab
scheme.
Pak Suzuki provides various financial, insurance, repairing and customer care after sales
services for customers. As the security situation is worst in Pakistan, Pak Suzuki can also
provide tracking and security services for its customers. Providing security services will
increase trust of customers on Pak Suzuki.
The Company also contributes to auto parts industry for localization of imported parts as low
localization has made the industry vulnerable to adverse movements in the exchange rate,
which impacted production costs and retail prices. Pak Suzuki continues to pursue localization
in order to reduce the cost of product and keep the prices competitive besides saving of
foreign exchange.
Threats
Tough Competitors
Inflation rate
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Government policies
Criticism on Yellow Cab & Apna Rozgar Scheme leading to loss of goodwill
Despite being the leader and largest shareholder of Pakistan automobile industry, Pak Suzuki
is also facing several threats from local and international competitors. Tough competitors like
Toyota and Honda as well as import of used Japanese cars are a serious challenge for Pak
Suzuki.
The changing government policies are also badly affecting Pak Suzuki. Imposition of heavy
taxes and high import tariff has caused increase in production cost and declined in demand.
Devaluation of Pak Rupee against US dollar and Japanese Yen as well as unstable economic
conditions are causing serious threats to Pak Suzuki. Inflation and smuggling of spare parts
are a result of bad governance and mismanagement of government which is a threat to auto
sector.
The overall security and political situation in Pakistan is also less favorable for automobile
companies such as Pak Suzuki.
Pak Suzuki provided the vehicles for Yellow Cab and Apna Rozgar Scheme to the
government but allegations and criticism on this project also led to loss of goodwill of Pak
Suzuki.
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SWOT Matrix
OPPORTUNITIES
1. Increasing Demand for cars
2. Diversifying and expanding the
product line
3. Exporting locally assembled vehicles
S-O Strategies
1. Maximize market share by
producing more low price cars to
fulfill increased demand (S1,S2,O1)
THREATS
1. Tough Competitors
2. Inflation , unstable economic and
political situation
3. High Import tariff & Heavy Taxes
4. Cheaper and Used Imported Cars
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WEAKNESSES
S-T Strategies
1. Low price vehicles to overcome
threat of tough competitors
(S2,S5,T1)
2. Maintain market share by
producing low price vehicle to
compete imported cars (S1,S2,T2)
3. Reduce impact of smuggled
imported parts by producing cheap
spare parts (S5,T5,)
W-O Strategies
1. Focus on Looks and Design to
compete with Honda and Toyota
(W3,O1)
2. Increase distribution channels in
sub-urban areas to fulfill increasing
demand of cars (W5,O1)
3. Increase coordination with
government departments and form
partnership to provide vehicles
(W2,O5)
W-T Strategies
1. Enhance distribution to avoid
threat from second hand imported
cars (W5,T4)
2.Increase coordination with
government bodies for relaxed
policy over economic reforms and
taxes (W2,T3)
3. Increase distribution channels in
sub-urban areas to compete
competitors (W5,T1)
COMPANY MILESTONES
1975 Suzuki Motor Corporation Japan started assembly of 4x4 vehicles at Naya Daur
Motors.
1978 Assembly of Pickup started at Awami Autos Ltd.
1982 Joint Venture Agreement was signed between SMC and Pakistan Automobile
Corporation (PACO).
Production of Suzuki FX started.
1983 Pak Suzuki as a public limited company incorporated.
Industrial collaboration agreement executed with SMC.
1984 The company starts commercial operations
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PRODUCT LINE
SWIFT (1300cc)
The European inspired exterior provides Swift a
distinctive look. A distinctive stylish design that
give you comfort and luxury.
Colors: Pearl Red, Graphite Grey, Solid white,
Indigo, Silky Silver, Aqua Blue, Eminent Blue
ALTO
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.
Colors: Olive Green, Pearl Red, Graphite Grey, Solid
white, Indigo, Silky Silver, Aqua Blue, Eminent Blue
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MEHRAN 800cc)
Unrivalled in its class, MEHRAN is Pakistans largest
selling car as well as cash cow of company. Peak
performance and unmatched fuel efficiency make this
car prominent in market competition
MEHRAN VXR is the frontrunner.
Colors: Pearl Red, Graphite Grey, Solid white, Silky
Silver and Eminent Blue.
CULTUS (1000cc)
CULTUS is the blend of space and craft.
It has trim body Conceals sufficient space & flexibility for
both passenger and storage. CULTUS ensures everyone,
exceptional Value and quality.
LIANA
The Suzuki Liana available in 1300 cc manual transmission
and 1600cc automatic transmission takes you out of
ordinary and into the realm. Liana is entirely different car,
its style, dimension and comfort will inspire you.
Colors: Pearl Red, Graphite Grey, Solid white,
Indigo, Silky Silver, Aqua Blue, Eminent Blue
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JIMNY (1300cc)
JIMNY 4X4 JEEP 1300cc (Imported) Balanced, well-made
and off road properties bring you the ultimate pleasure of a real
4-wheel drive. It has got all the sporting spirit to go along for
adventurous safari.
Colors: Solid white, Silky Silver
APV (1500cc)
APV 1500 cc (Imported) The New APV gives you
everything you ever wanted in your vehicle. Lavish interior
for comfort, strong engine to carry loads and plenty of room
for passengers to enjoy a comfortable drive.
Colors: Pearl Red, Graphite Grey, Solid white, Indigo, Silky
Silver, Aqua Blue, Eminent Blue
WAGONR (1000cc)
WAGNOR is luxurious, spacious and attractive car.
Pak Suzuki launched new Wagon R on 18 April 2014
using the chassis code A1J310. It comes with three
variants of Wagon R VX, VXR and VXL in 9 body
colors.
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BOLAN (800cc)
It is old version of family car. Basically, Bolan vehicle
was manufactured for passenger purposes and it was
widely sold around the country.
RAVI (800cc)
It is multiple purpose vehicle. Widely sold across the
country. Purpose behind manufacturing Ravi is to
capture market which is related to low weight logistics
and carriage purposes.
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2012
2013
2014
Sales Revenue
58531
51061
53664
Growth %
11%
(13%)
5.1%
1499
2353
2623
Growth %
10%
57%
11.5%
977
1849
1921
Growth %
23%
89%
3.9%
2011
2012
2013
Mehran
Cultus
Alto
Liana
Swift
Ravi
Bolan
APV CBU (Imported)
Total
Market share (Car & LCV)
Market share (Car only)
29542
12863
12949
481
5855
14973
15676
366
92705
57.6%
49.6%
32920
12852
9509
361
6916
13948
19257
337
96100
61.9%
53.6%
31305
14370
141
5387
11681
13934
232
77050
55.3%
47.8%
Forex saving
2007
2008
2009
2010
2011
2012
2013
16838
13286
8461
14006
17012
17302
15380
23770
23537
14503
29960
39390
31054
27275
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BCG MATRIX
Star
From BCG matrix we can analyze that PSMC has covered high market shares. Market growth
is high in terms of JIMNY and BOLAN.
Question Mark
PSMC has introduced SWIFT to counter VITZ (TOYOTA). After introduction, it gained high
market shares but remained unsuccessful to grow in terms of market share.
Cash Cow
MEHRAN, CULTUS, RAVI and ALTO have generated high income to the company.
Although they have low market growth but share in market is very high.
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Dog
LIANA and APV scored Dog position in BCG matrix because of low market demand, high
competition and high prices of Units.
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CONCLUSION
Pak Suzuki has developed and placed itself in a very competitive position ever since the
beginning of its operations in Pakistan. Passionate study of Pak Suzuki Motor Company
Limited made us analyze that Pak Suzuki is fighting fit in the Pakistani automobile market
and is leading market shareholder. Pak Suzuki is producing cars at affordable prices for
middle class and low income people. It has positioned itself as an affordable and economical
product selling company. Although Pak Suzuki holds the maximum market share of Pakistani
automobile market still it is unable to compete with its rivals in Sedan and luxury cars. Pak
Suzuki has tried but failed to penetrate into luxury car market to counter its rivals like Honda.
Pak Suzuki is still determined to succeed in luxury car line and has launched Kizashi in
Pakistans automobile market hoping that it will help them to boom in sector of luxury cars.
Innovation can make them compete with luxury cars manufacturers. We recommend Product
Development strategy for PSMC to pursue in order to compete with HONDA and TOYOTA.
This strategy will help PSMC to grow its market share in terms of luxury cars. The market
strategy of Pak Suzuki needs to be enhanced in order to gain maximum market share and
increase its sales to place itself ahead of its competitors in the market. It also needs to focus on
price cutting methods to gain maximum sales in the present weak economic conditions. Pak
Suzuki needs to adopt latest technologies and enhance its vehicles with latest technology to
meet
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the
need
of
market.
REFERENCES:
www.paksuzuki.com.pk
www.pama.com.pk
www.globalsuzuki.com
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