Part-A

Articles With Review

Article # 1

Ali Hussan 28-30th march 2009

Expo centre karachi

The automobile assemblers have again fasten their seatbelts to make changes in car prices on

their own despite cut in input costs, while Production and Industries Minister Mian Manzoor

Ahmed Watoo appears to have closed their eyes on the powerful cartel of car assemblers and

their wrongdoings.

As the Prime Minister and President are highly engaged in pleasing the USA on  military

operations against militants in Swat, Buner, Dir etc, the issues confronting the consumers like

high prices of kitchen items and others automatically become secondary issues for the

government.

Same is the case with rising prices of cement, motorcycles, books and copies, household items,

rising poverty and lawlessness as these issues are also being tackled in a very lightly. The

government has never taken to task the powerful cement cartel who play havoc with prices

keeping in view demand and supply situation.   

As per press reports, responding to a supplementary question of MNA Abdul Qader Patel last

month that Indian Maruti is available at very cheap rate as compared to Pakistani Suzuki and

why Chinese cars are cheaper than locally made cars, Mr Watoo has proved that how ill

informed he is on the auto sector when he said that prices of locally assembled cars are

reasonable. However, the government would look into the complaints of high prices raised by the

assemblers.

The Minister was of the view that prices of cars are governed by market forces mechanism.

However, the government keeps an eye on the car prices and intervenes through an appropriate

policy and administrative measures to check any unreasonable/abnormal increase in car prices.

Wattoo said that quality of Pakistani cars are much better than Indian cars but if there is any huge

price difference the government will ensure to bring prices of locally made cars at affordable

level.

He said that the Ministry has been holding meetings with the assemblers to ensure availability of

cars to the masses at reasonable level.

Perhaps Mr Wattoo has taken the issue of high car prices in Pakistan as a routine matter in a

recent debate at the assembly. Neither Mr Watoo nor previous ministers have taken the price

hike issue of cars very seriously and they have been just showing light concerns instead of asking

them strictly about the price hike.

It seems that the Minister is not aware properly about the meteoric price hike made by the car

assemblers in the last one year owing to high input cost, rise in steel prices, Yen appreciation

against the rupee making the cost of imported parts costlier. However, the Minister had yet to

check as to why the prices of locally made cars had not been declined significantly after sharp

fall in steel products followed by some stability in rupee-yen parity.

Only Pak Suzuki Motor Company Limited (PSMCL) has surprised the buyers by slashing the

prices by Rs 2,000-55,000 on April 17 which appears an eye wash the way prices of imported

steel and local steel products have come down. PSMCL had very little passed on the impact on

consumers in view of decline in price of imported parts and local steel prices coupled with

stability between the Rupee and Yen parity from December 2008.

In a surprise move, the Indus Motor Company (IMC) on May 11 had increased the prices of its

various Toyota Corolla models by Rs 30,000 without giving any reason.

The XLI and GLI model are now available at Rs 1,299,000 and Rs 1,419,000 as compared to Rs

1,269,000 and Rs 1,389,000 respectively.

The price of 2.OD model has also been raised by Rs 30,000 to Rs 1,349,000. Few months back,

the company had reduced its price by Rs 100,000.

On April 20, when Pak Suzuki Motor Company Limited (PSMCL) had reduced the prices by Rs

2,000 to Rs 55,000 to boost up its losing sales, buyers were also expecting some price cut from

IMC and Honda Atlas Cars.

All the assemblers had raised the prices sharply in the last one year owing to rising cost of

imported inputs, increase in prices by Pakistan Steel and appreciation of Japanese Yen against

the rupee.

In view of the figures released by Pakistan Automotive Manufacturers Association (PAMA), a

total of 3,366 units of Corolla were sold in April 2009 as compared to 2,606 units in March and

2,444 in February. However, Corolla’s total sales in July-April 2008-2009 fell to 20,626 units

from 27,277 units in the same period of last fiscal.

The overall car sales had declined by 50 per cent to 60,583 units in July-April 2008-2009 as

compared to 120,859 units in the corresponding period of last fiscal.

An analyst at Jehangir Siddiqui Research linked the overall decline to economic slowdown, high

car prices, political tensions and high rate of financing. 

Market sources said that the IMC had increased the price after smelling demand as the newly

launched Honda City has failed to click the mind of prospective buyers. Many authorized dealers

are also charging premiums on Toyota Corolla by Rs 10,000-15,000.

Honda Atlas Cars Pakistan Limited had yet to announce any fluctuation in prices. However, the

company had increased the price on Honda Civic VTI PTSR by Rs 30,000 to 1,889,000 on April

3 from 1,859,000 without assigning any reasons.

The new City models were being booked in the last quarter of 2008 for delivery in the first

quarter of 2009 at a provisional price for approximately a million rupees against full payment.

Hundreds of cars were booked against full payment by Honda as the car in India was being

advertised in the media which was widely seen in Pakistan as well.

The shock came in the first week of February 2009, when the new price was announced and

customers were asked to pay the difference with no time table of its delivery. Historically, price

of Honda City had always remained below the price of Toyota Corolla but huge order in hand

was a golden opportunity for the company to make profits, and thus the price of 1,319,000

shocked the buyers.

Many cancellations were reported as by paying the difference, the delivery time was not being

guaranteed either. Many customers, who had paid the difference, were still awaiting their cars

and remained at the mercy of the manufacturer and their dealers.

Honda City might be an attractive car then Corolla but sharp increase in its price in a short span

was hard for the buyers to digest it. Increase in prices had started in early 2008 when price of

steel complimented with increase in exchange rate had already sky-rocketed its price which

could be over 50 per cent now since 2007.

Nissan Sunny and Pak Suzuki had revised its price up to Rs100,000 but the sales were still not

picking up as compared to last year. 

Market sources said that many investors, who had got the delivery now of Honda City after

booking in January 2009, are offering discount of Rs 25,000-30,000 on manual transmission in

anticipation of some kind of price cut by the assembler. However, City automatic transmission is

being sold on premium of Rs 25,000-30,000.

The booking of City has slowed down sharply as it still costs Rs 20,000 more as compared to

Corolla XLI’s new price of Rs 1,299,000. Sale of Honda City had fallen to 675 units in April as

compared to 1,202 in April. Similarly, Honda Civic sales fell to 261 in April from 457 units in

March.

Sale of Suzuki Cultus and Alto had fallen to 7,750 and 5,311 units in July-April 2008-2009 as

compared to 22,137 and 15,550 units in the same period of last fiscal. Mehran sales fell to to

11,142 units in the last 10 months from 29,835 units. Hyundai Santro sales declined to 327 units

from 1,924 units. Daihatsu Cuore sales and Suzuki Liana sales were recorded at 5,130 and 716

units as compared to 10,008 and 2,616 units respectively.

Chairman Senate Farooq H.Naek in a chat with MD Pak Suzuki Motor Company Hirofumi

Nagao has said that automobile makers must work out smaller, cheaper and environmental

friendly cars to cope successfully with growing congestion on the roads, pollution and parking

problems.

A small and cheaper car on the pattern of Tata’s Nano is the need of the hour. Pakistan should

have its own version of Nano to suit the need of expanding middle class.

Nano’s assessment like its utility, fuel consumption and passenger safety which are prime

consideration with any automobile company would come out when the cheaper car will be tested

on the roads.

Some players had tried to launch small cars but they had failed miserably owing to lack of

government’s patronage, financial problems, poor marketing and quality of vehicles, low

Chinese quality engines etc.

Review on Article

This article is concern about the raising of prices on automobile industry especially in Pakistan

due to many reasons. If we review overall automobile industry we come to know that main

reason of rising in prices of cars is political instability because in this situation inflation rate is

also increase and value of our currency is decrease. When value of currency decrease then import

of cars expenses are very much high and parts which we use for locally made cars. The issue of

high car prices in Pakistan as a routine matter from last two years even Indian Marti is available

at very cheap rate as compared to Pakistani Suzuki.

The quality of Pakistani cars is much better than Indian cars but there is a huge difference of

prices, so Government should take action about the imports of cars by an appropriate policy.

Through this policy cars are sale at reasonable prices and Government will ensure to bring prices

of locally made cars at affordable price. Today one more problem is that the fluctuation is

suddenly arising in the prices of cars and the delivery of cars also not meets. When new price

was announced and customers were willing to pay but they were still awaiting their cars and

remained at the mercy of the manufacturer and their dealers. In our country where political and

economic issues are very much, it is difficult to stabilize the prices of cars until we not tried to

make small cars and improve their quality.

Article # 2

Andy Carlton October 12, 2009

A considerable number of years ago looking for an extensive variety of automobiles in Pakistan

was not possible, with Toyota as the chief auto producer. However, the last several years has

witnessed a huge growth in the type of models for possible buyers to pick from. Partly because

of native operations being created and an boost in second hand imports, a more assorted range of

automobiles can be seen on city routes.

Toyota is still the foremost auto producer in Pakistan with respected makes like the Corolla

outselling all other makes. Toyota has won a reputation of dependability through the many

decades of its market presence here and as a consequence, enables dealers to gain great resale

price in the second hand auto business. Though not well liked for its style Corolla has lost a

decent amount of market share to sportier, finer looking automobiles like the Honda Civic.

The Honda Civic is a close competitor for the top spot but in spite of several years in Pakistan, it

still ranks second. Well-known for its style and comfort, the Civic has become somewhat of a

status icon for the Pakistani elite. It has launched heaps of brands in Pakistan with each one

being more profitable than the preceding one. Honda automobiles also achieve extraordinary

resale price in the second hand auto industry and are regularly obtainable in periodicals and

online classifieds.

Suzuki has a couple of considerably established styles in the hatchback and coupe class by the

name of Khyber and Mehran, respectively. These automobiles are very reasonably priced and

serve possible buyers with inadequate budgets. They are also enormously inexpensive to procure

and look after, with brand new and utilized spare parts easily obtainable in the market. Even

though they do not furnish the same first-rate quality given by Toyota and Honda, these

automobiles are reliable and are wonderful cash savers.

Some other models that have grown generally widespread include a large variety of Toyota

models as well as different makes like Kia. In spite of being offered in a more limited range and

imported from other locations, these automobiles have become much more familiar in the last

many years.

It is apparent that Asian auto companies command Pakistan’s auto business and even though a

handful of European, American and Korean models have been present for many years, there is a

vast lag between them and the major automobiles made by producers like Honda. Even though

Honda rapidly attained market share a only some decades ago , the circumstances were totally

different then and for International auto producers to obtain a key portion of the industry will be

a considerably tougher task.

Review on Article

This article tells us about Pakistan’s top cars and also tells us that Asian Car Manufacturers

Dominate Pakistan's Market. In this article it is said that many years ago here was no variety of

automobiles in Pakistan but now there are number of different kinds of cars. Toyota is the first

auto manufacturer in Pakistan and it has won a reputation of reliability through many decades of

its presence in the market. Toyota has enabled dealers to gain resale price in second hand auto

business. Honda Civic ranks second in Pakistan. It is well known for its style and comfort.

Honda automobiles also achieve extraordinary resale price in second hand auto industry. Suzuki

has a lot of styles. Suzuki automobiles prices are reasonable and they serve buyers with short

budget also. Suzuki automobiles are reliable and wonderful cash drivers. Some other models

have grown including a large variety of Toyota models as well as different makes like kia.

Despite of imported from other locations and offered in a more limited range these automobiles

have become familiar in last many years. Asian auto manufacturers lead Pakistan’s auto market.

Honda quickly achieved market share some decades ago and the conditions were totally different

and for international auto manufacturers it will be a difficult job to obtain a key portion of

industry.

Article # 3

H.M Shahzad 28-30th march 2009

Expo centre karachi

The government’s decision to curtail import of used cars is now proving a sigh of relief for the

local car makers in terms of rising demand but this has closed an opportunity for the prospective

buyers to make their choices on their own whether to buy locally made or imported used cars.

With a lot of restrictions through budgetary and trade policy decisions in the last two to three

years, the import of used cars under various schemes has been persistently plunging sharply. As

a result, a number of buyers have shifted towards locally assembled cars now, thus boosting its

sales from April onwards this year.

The July-August 2009 period also proved highly pleasing for the car makers as the sales surged

to 17,950 units as compared to 13,316 units in the same period of last year. Many market pundits

predict a growth of 25-30 per cent in sales at the end of current fiscal year.

Because of high demand, authorized dealers of locally made cars have started charging premium

from the restless buyers who are willing to buy cars on the spot at any cost instead of waiting for

the delivery period of one to two months. Besides, many growers have entered in the markets for

spot buying of cars after a bumper wheat and rice crops.

Despite the fact that interest rates on banks’ car financing hover between 16.5 to 21 per cent

depending on the banks’ package, a large number of buyers are on the hunt through cash

purchase instead of going through leasing whose share has fallen to 15-20 per cent now. In 2006-

2007, the share of car financing through banks was 70 per cent.

There is definitely some economic and political harmony in the country in the last few months

that has injected a new vigor among buyers for purchasing new cars while some cut in prices has

also lured many buyers. However, the cut in prices by the assemblers is an eye wash as the prices

have already been raised phenomenally before the price cut.

But the main reason of improvement in sales of locally made cars is certainly the massive drop in

arrival of used cars. People virtually do not have any choice but to buy decades’ old models. It is

really shameful and painful test of patience for the buyers to buy a Suzuki Mehran 800cc

(originally 1989 model and design suspended in Japan) as new 2009 model with so called new

crystal headlights and backlight but without any watch, audio system, radio, dim old

speedometer display, black bumpers, without CNG and AC at Rs 402,000.

Consumers face same ordeal in buying old model of almost 10 year old Cultus and more than

seven year old Alto 1,000c at very high prices.

Chairman All Karachi Motor Dealers Association H.M. Shahzad is of the view that drop in

import of cars does not mean that the demand has diminished. People still demand used cars but

it is not available in abundance.

The price of used cars has also surged by 10-25 per cent if compared with rates earlier this year.

He said people have switched over to used cars after sharp increase in new locally assembled

cars, but they have very limited choices and prices are high. However, despite cut in prices, local

made cars are still costlier.

He said that new locally assembled Mehran was priced at Rs 330,000 in 2008 which now costs

Rs over Rs 400,000, while Alto is now available at over Rs 700,000 as compared to Rs 550,000

in 2008. Cultus now sells at over Rs 900,000 as compared to around Rs 700,000.

He recalled that import of used cars and other vehicles hit 75,000 mark in 2005-2006 when 10

year old cars were allowed. After the decision of allowing five year old cars, import of used

vehicles fell to 42,000 units in 2006-2007. The five year restriction remained in vogue earlier

2007-2008 but later the age limit of vehicles was restricted to three year followed by cut in

depreciation to one from two per cent and 10 per cent increase in import duty, which resulted in

falling of imports to 35,000 units in 2007-2008. In 2008-2009 imports were only 7,000-8,000

units. For example, he said when age limit of car was reduced to 10 to five years, around 6,000

cars were arriving every month. When age limit was reduced to from five to three years and

depreciation was two per cent, import fell to 3,000 units per month. Now in July-September this

year only 1,200 cars had been imported.

The government has never seriously checked the price hike made by the car assemblers whether

it was at par with the currency devaluation and rising import of CKD kits cost or it was an

attempt to fleece consumers. He urged the government to bring back the depreciation to two per

cent on used cars so that imports could resume and people could get the used cars.

Shahzad claimed that the premium on Corolla GLI is over Rs 100,000 while on XLI it is Rs

70,000-90,000. The on money on Honda Civic Oriel is Rs 80,000 while on City it is Rs 20,000-

25,000.

It is strange that local assemblers claim that authorized showrooms usually are not involved in

encouraging the illegal practice of charging on money from the customers, but practically the

officials of showrooms are openly demanding extra money in case people show their utmost

desire to have cars on urgent basis.

Some non-genuine car dealers have also emerged in the markets who after taking full payment

from the customers are not delivering the cars at the right time. They are still giving their

advertisements in the print media for ready delivery of cars and their booking since no body is

checking their illegal practice. Market reports suggest that many customers who have made full

payment to these non genuine dealers have yet to get their vehicles for more than one year. The

affected customers are now highly perturbed as nobody is ready to address their grievances.

Customers’ huge money is now blocked while the non-genuine dealers are either taking interest

on this amount by putting this money in the banks or investing in other sectors.

It is very strange that recently thousands of people are making line for subsidized flour and many

women have lost their lives in a stampede for cheap food items, but many cash rich people in our

society are out to get new locally assembled cars and are not bothered of paying hefty premium

on them.

Just before Eid, many prospective buyers were desperate to have the new locally assembled cars

before Eid as they had surplus cash in hand for paying the on-money. Many investors had also

entered in the car business thus creating an artificial demand. Market sources said that authorized

dealers were charging Rs 15,000-20,000 on Toyota Corolla XLI and Rs 50,000 on its GLi model.

Premium on Suzuki Mehran ranged between Rs 10,000-15,000 while on other model it hovered

between Rs 25,000-30,000. Premium on Honda Civic Oriel was Rs 60,000-70,000. Premium on

Daihatsu Cuore was Rs 10,000-15,000.

As the delivery period for Corolla Xli and Gli was one month and two months respectively,

people happily paid on money on spot buying.

The old age cars had also become a hot item before Eid and many showroom owners in the last

10 days before Eid made late night sittings waiting for the buyers to turn up. Due to massive

decline in imports of used cars, people had gone wild for very old model cars especially from

1986 onwards.

There is a marked difference in the price of car models from 1984 to 2008 models if they are

compared with the prices prevailing earlier this year. Used car dealers had demanded very high

prices before Eid and till today they had maintained the high prices for used cars.

The steep rise in prices of locally assembled cars has also caused an impact on used cars also in

shape of price surge.

For example, used car dealers are demanding Rs 375,000-400,000 for 2005 Alto AC/CN

Review On Article

Import of used cars under various schemes has been persistently plunging sharply that’s a

number of buyers have shifted towards local assembled cars. Because of high demand authorized

dealers of locally made cars have started charging premium from those buyers who are willing to

pay cars on the spot rather than waiting for the delivery period. Interest on cars leasing rates are

very high, so people are willing car on cash purchase rather than on leasing.Ecnomic and

political harmony in the country in the last few months that has injected a new vigor among

buyers for purchasing new cars while some cut in prices has also lured many buyers. Main

reason of improvement in sales of locally made cars is certainly the massive drop in arrival of

used cars.

Some non-genuine car dealers have also emerged in the markets who after taking full payment

from the customers are not delivering the cars at the right time. It is strange that local

assemblers claim that authorized showrooms usually are not involved in encouraging the illegal

practical of charging on money from the customers, but practically yhe officials of showroom are

openly demanding extra money in case of utmost desire to have cars on urgent basis. The steep

rise in prices of locally assembled cars has also caused an impact on used cars also shape of price

surge.

Part-B

a. Introduction and History of the Automobile Industry

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 2nd phase of Automobile assembly started in

1983 with the introduction of FX 800 CC Suzuki Car. In 1989 Pak. Suzuki changed the Model of

FX 800 CC with Mehran 800CC. Pak Suzuki thereafter in 1992 introduced Khyber 1000 CC and

1300 CC 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 Atlas cars (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&P was 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.

Major Policies after year 2005:

1. Tariff Based Systems (TBS)

2. Auto Industry Development Program (AIDP).

July 1st 2006, the deletion programs for the Automotive Sector have been replaced by the Tariff

Based System (TBS).The deletion programs have gradually been phased out under the WTO

regime to become TRIMs compliant. The TBS is the outcome of a long drawn consultative

dialogue between all stakeholders including OEMs and Vendors, belonging to different sub-

sectors of the Automobile Industry.

The TBS has been developed with the following overriding objectives:

Preservation & promotion of technologies that have been developed in the

country

Protection to the present job structure in the auto sector.

Promote job creation

Protect the existing & planned investment by the OEMs & Vendors

Promote new investment

Expand the consumer base to create economies of scale

The basic framework of Tariff Based System is as under:

1. Imports in CKD condition would be allowed only to assemblers having adequate assembly

facilities and registered as such by the concerned Federal Government Agency.

2. Parts/ components indigenized by June 2004 have been placed at higher rate of Customs Duty.

3. Parts not indigenized would be allowed at CKD rate of Custom Duty.

For the purpose to handle the switching from ISDP to TBS and to ensure stable policies the

consultations on the development of AIDP kicked off from the 8th March,2006 Workshop at

Islamabad by clearly defining the objectives at a time when the industry was switching over from

the deletion programs to a competitive based system. There was realization that the transition

phase may affect the rapid growth and sustainable development of auto industry. A

comprehensive development program with pre-announced tariffs to provide predictable and

stable environment was therefore much needed and the finalization and approval of AIDP by the

government was held on 13th November, 2007.

b.PEST Analysis

PEST analysis of an industry sector tells us the important factors that are affecting the industry

and influencing the companies operating in that sector.

Political Factors

It includes:

Government policies relating to the industry

Tax policies

Laws and regulations

Trade restrictions and tariffs

Economic Factors

The economic factors relate to changes in the wider economy such as

Economic growth

Interest rates

Exchange rates

Inflation rate

Social factors

Often look at the cultural aspects and include

Health consciousness

Population growth rate

Buying patterns

Technological Factors

The technological factors relate to the application of new inventions and ideas such as

R&D activity

Automation

Technology incentives

Rate of technological change

c. Porter five forces model

Porter five forces is a framework for the industry analysis and business strategy .It uses concepts

developed in Industrial Organization economics to derive five forces, which determine the

competitive intensity and therefore attractiveness of a market.

Threat of New Entrants

Threat of new entrants is very low in this industry. Automobile industry is very mature and has

successfully reached economies of scale.

Barrier to entry is that it takes an uncertain amount of capital to manufacture the automobiles. It

takes a huge amount of capital not only to be able to manufacture the products but also to keep

up with the R & D.

Bargaining Power of Suppliers

Bargaining power of suppliers is very low in this industry. When there are large number of

suppliers in an industry, they do not have much power. In automobile industry of Pakistan there

are many suppliers in this industry so manufactures can easily switch to another supplier if it is

necessary.

Bargaining Power of Buyers

In this industry Bargaining power of the buyers is moderately high. The buyers are very

important portion of the industries revenue. If buyers are not happy then there is risk of losing

buyers to their competitors. The buyers have low switching cost if they are not happy. The

bargaining power of buyers is not completely high because the buyers are not large ,they are few

in number and they do not have the ability to integrate backwards into the industry.

Threat of Substitute Products

Some of the substitutes are walking, riding bike or taking a train. Substitutes products depend on

geographic location of the consumer. In some places car is not as necessary and there subway is

the most effective means of transportation. However, in most places a person must have access

to an automobile in order to get around.

Intensity of Rivalry among Competitors

Rivalry among competitors is very strong is this industry. Reason behind such a high

competition is that there is a lack of differentiation opportunities. All the companies make cars,

trucks etc. The competitors are compared to one another constantly.

The durability price, quality, and many other aspects of different manufacturers are greatly taken

into consideration when deciding what type of vehicle to purchase. When different

manufacturers their products they even compare their products to their competitors.

Industry Attractiveness

Automobile industry of Pakistan is very attractive. Now Car has become a basic necessity in our

lives so we can’t avoid its use.

e.Opportunities & Threats

Opportunities

Growing Automobile Industry

Customers realizing quality matters, as problems are already cropping up in new entrants

models

Initiatives and proposals in process for coping with increased demand

Newer segments introduced with entry of new models, design, which still have huge

potential for growth

Tremendous potential for growth and profitability.

Threats

Many new features inherent in latest car models increasing customer expectations a great

deal for the future.

Crucial economic conditions of Pakistan can lead to the decreased sales.

WTO (World trade Order) opening local markets for global competition

Competitors launching newer models with stress on reduced price for our price sensitive

economy proving serious threat in near future

Theft of cars increasing, reaching 2500 cars in period of January-May 2008

EFE MATRIX

Key External Factors Weight Ratings Weighted score

Opportunities

Growing Automobile Industry

Customers realizing quality matters, as problems are already cropping

up in new entrants models

Initiatives and proposals in process for coping with increased demand

Newer segments introduced with entry of new models, design, which

still have huge potential for growth

Tremendous potential for growth and profitability.

0.12

0.09

0.1

0.1

0.07

3

2

3

2

1

0.36

0.18

0.3

0.2

0.07

Threats Many new features inherent in latest car models increasing customer expectations a great deal for the future.

Crucial economic conditions of Pakistan can lead to the decreased sales.

WTO (World trade Order) opening local markets for global competition

Competitors launching newer models with stress on reduced price for our price sensitive economy proving serious threat in near future

Theft of cars increasing, reaching 2500 cars in period of January-May 2008

TOTAL

0.1

0.1

0.07

0.15

0.1

4

3

2

4

1

0.4

0.3

0.14

0.6

0.1

1.00 2.65

THE COMPETITIVE PROFILE MATRIX

Critical Success Factor Weight

Honda Yamaha Suzuki

RatingWeight Score Rating

Weight Score Rating

Weight Score

Capitalizing on Industry Growth

0.2 4 0.8 3 0.6 1 0.2

Price competitiveness

0.2 2 0.4 2 0.4 2 0.4

Technological Innovation

3 0.15

0.05 4 0.2 3 0.15

Product Quality 0.15 4 0.6 3 0.45 3 0.45

Financial Performance 0.1 4 0.4 3 0.3 1 0.1

Market Share 0.2 4 0.8 3 0.6 1 0.2

Customer service/support 0.1 3 0.3 4 0.4 3 0.3

TOTAL 1.00 3.5 2.9 1.8