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Report on Dewan Farooque Motors

EXECUTIVE SUMMARY

Automobile industry is concerned with transporting vehicles, which include passenger class, trucks and computers. Following are the key players in automobile industry in Pakistan Toyota, Suzuki, Honda, Nissan, and Dewan Farooque Motors, in start the main players in this industry are Toyota, Honda and Suzuki and among these now Dewan Farooque Motors (DFML) also capture a great part of market share in car industry of Pakistan. DFML is producing the products of two famous Korean companies KIA MOTORS and HYUNDAI MOTORS of Korea. It is producing 6 products like Hyundai shehzore truck, which is a pickup for carrying the luggage; another products of Hyundai are 1000cc car named santro club and grace van for office use. The products of Kia motors are 1300cc car Kia classic 1500 cc car Kia spectra and 2000cc turbo diesel jeep. DFML is a joint venture between the Dewan Mushtaq group of Pakistan Hyundai motors limited Korea and Kia motors Korea.

The company was incorporated on December 17, 1998. It is situated at Dewan city Sajawal 152 kms away from Karachi. Its annual capacity is 20,000 units per year, expendable to 40,000 units per year. Its estimated project cost including total fixed cost, is Rs. 144,340,000.

Appreciation of Korean van or devaluation of Pak Rupee increase the cost of imported material, which include CKD kits, that account for 75% of the total cost. Tax policies of the government also affect the company. Presently the CVT rate is 6.25% and upon that, they have to pay 40%, which causes an increase in the cost of the vehicles.

In political and legal forces, poor law and order situation, especially in Karachi, also affect the country. Political instability in the country and the government’s inconsistent policies, for example, taxi scheme from Nawaz Sharif Government, also produce effect on the auto industry in Pakistan. The result of the Taxi scheme is that, 3000 taxis are still present in the market, awaiting sale.

Industry Specific Deletion Target means numbers of parts and spares will be manufactured locally through vendors. Industry Specific Deletion Target specifies that “No Roll Back”. This policy discourages the new entrants because the new entrants will have to start at the deletion level that already exists in the industry.

 

 




 Dewan Mushtaq group 

Dewan Mushtaq Group has an annual turnover exceedingPak Rupees 30 billion. The main fields of business include textiles, sugar, polyester and acrylic staple fiber, assembly-cum-progressive manufacture of automobiles and equity participation in a private bank. Other allied businesses include a polypropylene sacks making and particle board manufacturing plants as downstream industries of sugar industry and automotive parts manufacturing as backward integration of its automobile industry.

All group companies are highly reputed for paying their shareholders handsome dividends regularly, and in fulfilling their financial obligations and commitments on time.

The history of Dewan Mushtaq Group goes way back to the year 1916 to the State of Patiyala in the Punjab Province of India when a small cottage industry was set up by Dewan Mohammad and his son Dewan Mushtaq Ahmed to manufacture garments. During 1918, another establishment was started in Karachi to import clothing and other multifarious commodities, which were then sold all over India.

In 1947, the Dewan family migrated to Pakistan. They settled in Karachi, formed Dewan Mushtaq Sons, and started trading in commodities like tea, sugar, second-hand clothing, garments and fabrics. Due to hard work and honest dealings of the family, the business rose to new heights and by late fifties, the turnover of the firm was as significant as Rs. 60 million per annum.

The Group presently employs over 12,000 persons at its various plants and offices.

More information about DMG: -

Dewan Far Eastern Co. Ltd.

Business Intelligence Unit

Dewan Executive Development Center

IT Department

Social & Community Welfare 

Dewan Far Eastern Co. Ltd.

Dewan Far Eastern is the overseas sales office and responsible for obtaining export orders for cotton yarn, produced by DMG Textile Division. Mr. Taro Ishikawa looks after this office

 

Business Intelligence Unit

 

Business Intelligence Unit functions as the market research and intelligence cell of DMG. Though its principal responsibility is to collect and analyze the data about Fiber Industry, its key players including its users, namely fabric producers, it also carries out specialized market studies in other fields namely, textiles, automobiles, sugar etc, and it also performs financial analyses

 

Dewan Executive Development Center

Dewan Executive Development Center was established in June 2000. It was formally inaugurated on July 28, 2000 by Mr. Dewan Mohammad Yousuf Farooqui and was followed by a seminar on the Seven Habits of Highly Effective People, based on Steven Covey's bestseller.

Human Resource Development

The group is determined to establish a platform where it can provide the knowledge and skills to its employees so that they will be the torch-bearers of the organization tomorrow. DEDC is an in-house management development organization for excellence in training. It has been established with the explicit purpose of ensuring organizational growth and development and to serve the need for wisdom in corporate decision-making, thus playing an important role in the long-term success of Dewan Mushtaq Group.

Training & Development Programme.
Our training and development programme is an in-house programme that is designed to change the way we work and think. Our faculty is a blend of individuals from diverse backgrounds comprising of scholars and educationists of the corporate world.

 

 

Our Mission

"To provide a forum for exchange of ideas and knowledge with thorough training and development of individuals in the field of business so that they are well equipped to face the dynamic global environment."

Human Resource Development

The group is determined to establish a platform where it can provide the knowledge and skills to its employees so that they will be the torchbearers of the organization tomorrow. DEDC is an in-house management development organization for excellence in training. It has been established with the explicit purpose of ensuring organizational growth and development and to serve the need for wisdom in corporate decision-making, thus playing an important role in the long-term success of Dewan Mushtaq Group.

Training &Development programme

Our training and development programme is an in-house programme that is designed to change the way we work and think. Our faculty is a blend of individuals from diverse backgrounds comprising of scholars and educationists of the corporate world.

Our Objectives

  • To spark new and innovative ideas in the individuals so that they are competitive enough to face the global economic and market environment.
  • To equip DMG individuals with a thorough understanding of managerial and technological skills in a manner that has a profound effect on their personality and character.
  • To build leadership qualities in individuals so that they can make use of it efficiently and effectively in order to make every unit productive.
  • To help to bring about a paradigm shift by creating a dynamic and positive learning environment and changing our corporate culture.
  • To help DMG to cope with knowledge-based economy.
  • To provide DMG staff with basic conceptual training and impart latest managerial concepts / skills, so as to make them "knowledge workers" and on-line to deal with the challenges of modern business.
  • The core of DEDC training programme is that the concepts and training that are imparted should be thoroughly applied and further growth and development of an individual should be related through training and development.

Our Assurance

We believe that DMG members are our most precious resource, our human capital. We also believe 'human progress' to be the worthiest of goals through recruiting, developing, motivating, rewarding and retaining personnel of exceptional competence and providing them with a healthy working environment, competitive compensation, excellent opportunities for growth and a high degree of job security.

Our Commitment

We are committed to surpass competition by unleashing the constructive creative abilities and energies of our group's employees.

Seminars / Training Courses Conducted

  • The Seven Habits of Highly Effective People
  • Star Office Training
  • Communication Concepts and Skills, Level-I
  • Communication Concepts and Skills, Level-II
  • Seminar on Business Ethics
  • Finance for Non-Finance Executives
  • Presentation Skills
  • Office Etiquettes and Mannerism
  • 5S-Housekeeping

 

Future Programmes

  • Teamwork
  • Time Management

1. Effective Meetings Basic Supervision Skills (Urdu) Industrial environment.

  • Safety, Firefighting & First Aid
  • Motivation & Leadership
  • Knowledge Management
  • Emotional Intelligence
  • Negotiation Skills
  • Change Management
  • Conflict Management
  • Skills in Selling
  • Customer Service
  • ISO 9001

 

IT Department 

The Group, fully recognizing and realizing the importance of information technology in today's business and industry, established the IT Department in March 1999. The work on software development started with complete computerization at Dewan Sugar Mills with fully built-in automated system and simultaneous computerization of Dewan Farooque Motors Ltd.'s operations. The successful completion of both the projects gave an impetus to modernization of management process at DMG.

Currently, IT Department is working on plans for introducing technological advancement like ERP Development, Intranet and Extranet Solutions, On-line reporting systems etc.

IT Department of DMG is equipped with the most modern and highly advanced technological facilities in terms of hardware, software, data-transfer facilities.

 

Vision Statement of IT Department

I.T Department is dedicated to provide reliable information base using most modern technology to potential users at all levels. Our professionals individually and collectively, will constantly improve their competitive skills and excel in providing quality service covering all the aspects of the technology.

By embarking into the digital age we will accelerate the positive effects and mitigate the challenges as knowledge grows when shared.

We will innovate in a research-oriented manner with technologies to create our own future and value added activities for profitable relationships with our stakeholders, thus encouraging intellectual curiosity for our products, service and insight that will help people around the world, shape the ways business and education will be done in future. Our professionals and their competitive skills will be the hallmark, that combined with technology innovation, expert skills and teamwork, will keep us leaders in "CHANGE" to open new doors.

Social & Community Welfare

The Group is fully committed to the vision and principles laid down by its founding fathers. In keeping with its corporate philosophy and the spirit of social service and human respect, it strives to fulfill its corporate social responsibility. As an exemplary corporate citizen, the Group has set high standards in the area of public service and community welfare through a variety of philanthropic contributions.

Industrial Background

In 1968, the Dewan Family, under the leadership of Dewan Mohammad Umer Farooqui, ably supported by his younger brother, Dewan Salman Farooqui, decided to enter the industrial arena.

The first industrial unit was set up in 1970 under the name and style of Dewan Textile Mills Limited with a capacity of 25,080 spindles which has since been increased to 61,704 spindles. The Group strengthened its footing in the textile field by taking over another textile unit in 1975, now known as Dewan Mushtaq Textile Mills Limited with an installed capacity of 25,776 spindles. Thereafter, the Group established another spinning unit Dewan Khalid Textile Mills limited, consisting of 26,624 spindles.

By mid of 1980's, the Group with its characteristics of honesty, integrity and determination, became one of the major textile groups in the country. At this stage, the Group decided to diversify its activities to other spheres and entered the sugar industry. In 1987, the Group established Dewan Sugar Mills Limited with a sugar cane crushing capacity of 3,500 metric tons/day which has been gradually expanded to 9,000 metric tons/day, thus making it one of the largest sugar plants of the country. The Mills obtained ISO Certification in 1998.

The Group further diversified its range of business by setting up capital-intensive polyester staple fiber plant under the name and style of Dewan Salman Fiber Limited. The Group's credibility is evident from the fact that Dewan Group was able to obtain the collaboration with the world's giant conglomerates like Mitsubishi Corporation of Japan and Sam Yang Company Limited, Republic of Korea and set up the state-of-the-art plant in 1990.

The Company signed an agreement with Messrs Noyvallesina Engineering, an Italian company, for establishing an Acrylic Fiber and Tow Plant as part of its expansion plan. The Acrylic Plant with an installed total capacity of 55,000 tons per annum commenced commercial production operations from 1st July 2000. In the first phase, the Acrylic Plant is producing 25,000 tons acrylic fiber. In phase II, the output will be raised by 30,000 tons.

The Group manifested its decision to diversify into automobile industry of Pakistan through the incorporation of Dewan Farooque Motors Limited on December 1998. Within this month, two more milestones were reached: the signing of Technical License and Exclusive Distributor agreements with Hyundai Motor Company, Korea's No. 1 and world's seventh largest automobile manufacturer.

1999 marked another important year in the history of the Group when Dewan Farooque Motors signed the Technical Collaboration Agreement with Kia Motors Corporation of South Korea, in July 1999.

Dewan Farooque Motors is now a key player in the automobile industry of the country offering an impressive line up of passenger cars and commercial vehicles. Its state-of-the-art plant has a capacity of 10,000 vehicles per annum on single shift basis and is equipped with the latest facilities, which include CED paint system and robots for the final coat.

June, 2000, marked another important milestone in the history of the Group when its flagship company Dewan Salman Fiber Limited, acquired Dhan Fiber Limited and fully merged and incorporated its facilities into its operations .The total output of Dewan Salman Fiber Limited’s 3 polyester units is 700 tons per day. The company today enjoys a market leader's position and commands market share of 60% in the country's fiber industry.

Group of Companies

Dewan Mushtaq Group is one of the most highly respected and reputed industrial groups in Pakistan, enjoying the confidence of the general public, local and foreign capital markets, financial institutions and the Government.

The Group is amongst the top ranking business houses of the country with an annual turnover exceeding Pak Rupees 30 billion. The main fields of business cover textiles, sugar, automobiles, polyester staple fiber and equity participation in a private bank.

Further, all the Group companies are well reputed for paying their shareholders handsome dividends regularly and in fulfilling their financial obligations and commitments on time.

The Group comprises of the following companies that are listed on stock exchanges in Pakistan:

One of the largest polyester staple fiber manufacturing company of Pakistan

One of the largest sugar manufacturing company of Pakistan

Three textile companies namely;

Automobile Manufacturing

Tags: DEWAN, FAROOQUE, INTERNSHIP, MOTORS, ON, REPORT

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Replies to This Discussion

Dewan Farooque Motors Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dewan Farooque Motors Limited 

The Automobile industry has provided direct and indirect employments to thousands and pumped in billions of investments and contributed billions more in taxes and duties to the National economy. It has also saved billions in import substitution laying down foundation for many down-stream related industries. For the time being the local auto industry enjoys the protection against imports as imports are discouraged by heavy import duty. While the protection has benefited both the Government and the producers-the former in substantial revenue and latter in profitability-it has come at the cost of buyers whose concerns just don't seem to matter with the policy makers.

Leasing Companies and financial institutions have played a pivotal role to push the auto sales during last couple of years and are expected to play this role in the years to come. Although the mark rates have of late seen aggressive slashing and come down to single digit figures, the mark-up rates on auto financing still remains much to high shying away many potential buyers as compound interest in majority of the leasing options add up to over 30 percent depending on the payment period.

Thanks to the increasing internal competition resulting in the introduction of new models in recent months, and with many more such plans in the offing, the Pakistani automobile industry is in transition. Car buyers today enjoy a better choice brands and models as well as leasing options. Over the years, the auto prices have registered increases far above the rising rupee-dollar parity which took a turn for reverse in the middle of last year as the dollar kept shedding its value and now trades at around Rs.57 compared to Rs.67 then. None of the assemblers, who never miss an opportunity to immediately increase the prices of their products at the slightest depreciation of the rupee, have seen it fit to reduce the prices despite the substantial reduction in the value of dollar. The only thing that has happened is that the prices of vehicles have gone up.

 

The survival of the local industry which employs over 125,000 persons directly or indirectly and contributes a substantial revenue amounting to Rs.7 billion annually, excluding Rs.3 billion revenue by the auto vending industry, and saves around $5 million in import substitution-means a lot for the national economy. Better regulations and protecting the interests of the consumer, however, will also play a vital role to instill the much needed customer loyalty which will pay dividend in the years to come. Of late the Government has been under pressure to ask the auto companies to reduce the prices of the vehicles. However it now appears that the Government may not pressurize the carmakers to cut prices as they are multinationals and the country cannot afford to give any negative signal to foreign investors, especially Japanese ones, who have been supportive all along.

Dewan Farooque Motors Limited was incorporated in Pakistan on December 28, 1998 as a public limited company. The shares of the company are quoted on all the Stock Exchanges in Pakistan. The Company commenced commercial production through the interim facility from January 01, 2000. The main facility came into commercial operation from January 01, 2001. It is the baby of the Auto and Allied sector.

The Company has entered into separate technical license /collaboration agreements with Hyundai Motor Company, Korea and KIA Motors Corporation, Korea. The principal activity of the Company is the assembly, progressive manufacturing and sales of Hyundai and KIA vehicles in Pakistan. Its 4-wheel drive 'Sportage', sedans like 'Spectra' 'Pride' and 'Santro' has been well received by the public not to mention the pick-up 'Shehzore'. The response to the new 'Santro Club' launched in October 2002 has been very encouraging and this has enhanced capacity utilization and profitability of the Company

During the year 2002, sales turnover increased to Rs.4, 949.5 million as compared to last year's sales of Rs.4, 024.40 million. This was largely attributable to the successful launch of KIA Sportage 2000 c.c. Diesel sports utility vehicle and completion of a large fleet order for supply of Shehzore Trucks during the last quarter of the year under review. The Gross Profit ratio increased to 8.77 percent as compared to 5.45 percent of previous year. The improvement in the gross profit is attributable to favorable exchange rate of Pak rupee against U.S. Dollar and improved sales mix ratio. The manufacturing overheads increased by rs.41.864 million and administration & selling expenses by Rs.33.790 million as compared to the previous year.

The financial expenses increased by Rs.104.812 million as compared to previous year. The financial expenses increased by Rs.104.812 million as compared to previous year as the mark up was charged for the full year as compared to six months in the last year.
The net increase in cash and cash equivalents and increase in equity amounts to Rs.60.595 million and Rs.11.942 million respectively. Being initial years of the Company's operations resulting in low profitability, coupled with need for retaining funds to meet debt retirement schedule, the Board has not recommended any dividend for the year 2002.During the year 7,677 units were sold. Kia Sportage, sports utility vehicle, was launched during the last Quarter of the year. It received an overwhelming response and the sale of this vehicle during the year exceeded 500 units. To help customer cope up with increased cost of fuel and the Country to save valuable foreign exchange, natural gas versions of Spectra, Classic and Santro models were also launched during the year. With these new versions of various models, Dewan Motors is the only Company in the Country, which offers a wide range of vehicles, which run on natural gas. These models were well received by the market. The Company has introduced a new model of Hyundai Santro vehicle by the name of Santro 'Club'. The introduction of this vehicle launched in the second quarter of the financial year 2002-2003 has been well received and has increased sales volumes. The market domination of Hyundai Shehzore in the 1-ton Pickup Truck segment remained exceptional and the market share during the financial year was 61%. The market performance of Grace Van also remained satisfactory with 111 units sold during the year. Apart from the vehicle sales the after-sales parts operations also showed improvement as compared to the previous year. To ensure availability of Hyundai/Kia spare parts in the remote areas where dealerships are not present, the Company has appointed authorized parts jobbers. This strategy will meet customers' requirement of after-sales parts in those areas. During the year, four new dealerships were added to the 3S dealership network, bringing the total number of Hyundai-Kia dealerships to twenty-two. In order to ensure availability of Hyundai and Kia vehicles and after-sales services at the customers' doorstep, the Company plans to further expand the dealership network by adding dealerships in those cities and areas where dealers are not present.

In order to improve and upgrade the technical skills of service staff, DFML conducted in-house and on the job-training programmers. The main objectives were to provide quality product support, achieve customer satisfaction and minimize complaints related to the product and its operation.

It is worth mentioning that the earning per share for the year 2002 is Re.0.16 compared to a negative EPS of Re.0.42 for the previous year. The book value per share has also improved marginally at Rs.10.60 compared to Rs.10.44 previously.

Company Philosophy


The Group's corporate philosophy is based on following principles laid down by its founding fathers and pioneers:

  • Credibility, integrity and honesty
  • Straight forward business dealings
  • Work as a worship
  • Spirit of social service and human respect

By following the above philosophy, the Group enjoys an excellent corporate image amongst business community, banks, financial institutions, and governmental circles. The market price of Group companies shares is the most prominent reflection of this confidence.

Mission Statement

 

The mission of Dewan Mushtaq Group is to be the finest Organization, and to conduct business responsibly in a straightforward way.

Our basic aim is to benefit the customers, employees and shareholders, and to fulfill our commitments to the society. Our hallmark is honesty, initiatives and teamwork of our people, and our ability to respond effectively to change on all aspects of life including technology, culture and environment.

We will create a work environment, which motivates, recognizes, and rewards achievements at all levels of the organization, because

IN ALLAH WE TRUST & IN PEOPLE WE BELIEVE

We will always conduct ourselves with integrity and strive to be the best.

THE AUTOMOBILE INDUSTRY IN PAKISTAN.

 

The total registered automotive vehicle (according to 1998 to 2002data) plying on the roads in Pakistan are bout 3,123,000, which includes 604,000 motor cars starting from the British and European and followed by Anglo-American cars, the country has clearly decided in favor of Japanese cars. The country gave an exclusive right in 1983 to one of the Japanese car manufacturers to make a totally local car within Pakistan. This exclusiveness, however, gave way in favor of another Japanese car manufacturer 1992.

The environment made in automobile industry is Rs. 5.344 billion including foreign equity of Rs. 1.532 billion. The industry has total current capacity of 105,500 cars per annum.

The automotive industry contributes an amount of about Rs. 7.233 billion to the government revenue annually besides saving a foreign exchange of US$ 95.5 million per year.

The passenger car industry in this country has great prospectus. The Pakistani population is about 140 million people, and the present rate of car on the road, the average comes to be 232 persons per car, which is far below the normal standards of 109 persons per car among the developing countries, particularly the South East Asia and the developed world, where the average is 8 persons per car. There has been a growth of passenger cars in the country, which were 87,043 for the period 1984 to 1989 and grew to 240,304 including light commercial vehicles during the period 1990 to 1997 at an average growth rate of 7.7% in 8 years or 31.15 since 1994 given diagram shows the number of vehicles per 1000 persons.

KEY PLAYERS IN THE INDUSTRY

Total number of existing players at this time in they industry is five and one is planned.

 

1. Toyota Indus Motors

2. Honda Motors

3. Pak Suzuki Motors

4. Nissan Qandhara motors

5. Dewan Farooque motors

And among these three, Toyota Indus Motors has got a leading position.

 

TABLE 2: THE ENVIRONMENT OF AUTOMOBILE INDUSTRY

 

Up to 1000 cc

1000 to 1200

1300 & above

Van

Pickup

4X4

Capacity

EXISTING

Toyota

 

 

O

 

O

 

20000

Suzuki

O

O

O

O

O

O

50000

Honda

 

 

O

 

 

 

10000

Nissan

 

 

O

 

 

 

12000

DFML

 

O

 

 

O

 

10000

PLANNED BRANDS

Ssang Young

 

 

 

 

 

O

3500

Total Capacity

105,500

MARKET

47000

Passenger Car

340000

 

LCV & Jeep

13000

 

Capacity available for future

58,500

 

The survival of the local industry which employs over 125,000 persons directly or indirectly and contributes a substantial revenue amounting to Rs.7 billion annually, excluding Rs.3 billion revenue by the auto vending industry, and saves around $5 million in import substitution-means a lot for the national economy. Better regulations and protecting the interests of the consumer, however, will also play a vital role to instill the much needed customer loyalty, which will pay dividend in the years to come.

Of late the Government has been under pressure to ask the auto companies to reduce the prices of the vehicles. However it now appears that the Government may not pressurize the carmakers to cut prices as they are multinationals and the country cannot afford to give any negative signal to foreign investors, especially Japanese ones, who have been supportive all along.

Dewan Farooque Motors Limited was incorporated in Pakistan on December 28, 1998 as a public limited company. The shares of the company are quoted on all the Stock Exchanges in Pakistan. The Company commenced commercial production through the interim facility from January 01, 2000. The main facility came into commercial operation from January 01, 2001. It is the baby of the Auto and Allied sector.

The Company has entered into separate technical license /collaboration agreements with Hyundai Motor Company, Korea and KIA Motors Corporation, Korea. The principal activity of the Company is the assembly, progressive manufacturing and sales of Hyundai and KIA vehicles in Pakistan.

Its 4-wheel drive 'Sportage', sedans like 'Spectra' 'Pride' and 'Santro' has been well received by the public not to mention the pick-up 'Shehzore'. The response to the new 'Santro Club' launched in October 2002 has been very encouraging and this has enhanced capacity utilization and profitability of the Company

During the year 2002, sales turnover increased to Rs.4, 949.5 million as compared to last year's sales of Rs.4, 024.40 million. This was largely attributable to the successful launch of KIA Sportage 2000 c.c. Diesel sports utility vehicle and completion of a large fleet order for supply of Shehzore Trucks during the last quarter of the year under review. The Gross Profit ratio increased to 8.77 percent as compared to 5.45 percent of previous year.

The improvement in the gross profit is attributable to favorable exchange rate of Pak rupee against U.S. Dollar and improved sales mix ratio. The manufacturing overheads increased by rs.41.864 million and administration & selling expenses by Rs.33.790 million as compared to the previous year.

The financial expenses increased by Rs.104.812 million as compared to previous year. The financial expenses increased by Rs.104.812 million as compared to previous year as the mark up was charged for the full year as compared to six months in the last year.

The net increase in cash and cash equivalents and increase in equity amounts to Rs.60.595 million and Rs.11.942 million respectively. Being initial years of the Company's operations resulting in low profitability, coupled with need for retaining funds to meet debt retirement schedule, the Board has not recommended any dividend for the year 2002.

During the year 7,677 units were sold. Kia Sportage, sports utility vehicle, was launched during the last Quarter of the year. It received an overwhelming response and the sale of this vehicle during the year exceeded 500 units.

To help customer cope up with increased cost of fuel and the Country to save valuable foreign exchange, natural gas versions of Spectra, Classic and Santro models were also launched during the year. With these new versions of various models, Dewan Motors is the only Company in the Country, which offers a wide range of vehicles, which run on natural gas. These models were well received by the market. The Company has introduced a new model of Hyundai Santro vehicle by the name of Santro 'Club'.

The introduction of this vehicle launched in the second quarter of the financial year 2002-2003 has been well received and has increased sales volumes.

The market domination of Hyundai Shehzore in the 1-ton Pickup Truck segment remained exceptional and the market share during the financial year was 61%. The market performance of Grace Van also remained satisfactory with 111 units sold during the year. Apart from the vehicle sales the after-sales parts operations also showed improvement as compared to the previous year. To ensure availability of Hyundai/Kia spare parts in the remote areas where dealerships are not present, the Company has appointed authorized parts jobbers. This strategy will meet customers' requirement of after-sales parts in those areas.
During the year, four new dealerships were added to the 3S dealership network, bringing the total number of Hyundai-Kia dealerships to twenty-two. In order to ensure availability of Hyundai and Kia vehicles and after-sales services at the customers' doorstep, the Company plans to further expand the dealership network by adding dealerships in those cities and areas where dealers are not present.

In order to improve and upgrade the technical skills of service staff, DFML conducted in-house and on the job-training programmers. The main objectives were to provide quality product support, achieve customer satisfaction and minimize complaints related to the product and its operation.

It is worth mentioning that the earning per share for the year 2002 is Re.0.16 compared to a negative EPS of Re.0.42 for the previous year. The book value per share has also improved marginally at Rs.10.60 compared to Rs.10.44 previously.
(The writer is Head of Research. Switch Securities (Pvt.) Limited, (a wholly owned subsidiary of Islamic Investment Bank Limited).

VOLUME & SIZE

 

THE PROJECT

The aim of joint venture is progressive manufacture of Toyota vehicles and components parts with an initial annual capacity of 20,000 units expandable to 40000 units or more to meet the requirements and quality standard of the automotive industry for tile Twenty-first Century. A detailed deletion program envisages a deletion of 55% (average). Deletion for the first year was 21.01%.

 

INVESTMENT

The project envisages a total investment o f Its 1412 million, including equity of Rs. 786 million. The estimated project cost includes total fixed cost of Rs. 1,411,340,000; total equity of Rs. 983500000 and total debt of Rs. 428,840000.

 

LOCATION & FACILITIES

The production facilities are located at Dewan city sajawal 130 kms away from Karachi on land measuring over 105 acres at a cost of Rs. 37 million. High quality metallic road to the factory site is available along with other infrastructure facilities provided by authority.

The necessary civil work for production facilities comprise of:

v Paint Shop

v Assembly Shop

v Welding Shop

v Compressor Transformer Room

v Guard Room

v Internal Roads

v Underground & Overhead tanks, etc.

The main factory building & ancillary works are spread over covered area of around 40,000 sq. meters.

 

PRODUCTION CAPACITY

Production Per Day = 54 units

Production Per Day Capacity = 80 units

 

Hyundai & Kia research & development:

To retain its cutting edge of technology, and to meet the constantly rising quality expectations of its customers, Hyundai Motor Company spends 8% of its revenue in R&D activities. Following the acquisition of Kia Motors Corporation, Hyundai Motor Company now has eight R&D centers in different parts of the world. This has resulted in superior technological competitiveness in the development of advanced vehicle programs including the electric, solar, hybrid and CNG fuel cars as well as intelligent vehicle systems.

 

Technology & quality:

Hyundai & Kia have taken tremendous strides in the pursuit of quality at all levels of the organization from design engineering to process control and final assembly. Through its state-of-the-art technology, both Hyundai & Kia are committed to meet the highest standards of performance, durability, safety and comfort to offer its customers the best value for their money. Conscientious environmental manufacturing processes ensure harmonious relationship between nature and the people who inhabit it.

Dewan Farooque motors limited:

Dewan Farooque Motors Limited (DFML) was established in 1998 with the signing of Technical Licensing Agreement (TLA) with Hyundai Motor Company of South Korea for the distribution and progressive manufacture of Hyundai vehicles, their spare parts and accessories in Pakistan. Hyundai is the largest business group of South Korea and contributes 25% to the GDP of South Korea.

DFML is an important addition in the family of Dewan Mushtaq Group (DMG). It is fully owned by the group and local Pakistani investors showing the commitment of DMG with the people of Pakistan. The company is also listed on all the stock exchanges of Pakistan.

DFML is committed to offer cost competitive products offering superior value for money in a market that is dominated by relatively expensive Japanese products of outdated design and technology.

DFML'S product range:

DFML is the only company manufacturing Hyundai and Kia vehicles in the same plant outside the parent country, Korea. It has plans to expand its product range to cover all segments of the automobile market. It has already introduced products belonging to 6 distinct segments of the automobile market including 1000 cc, 1300 cc and 1500 cc sedan car segments as well as a 1-ton pickup and van and to top it all with the one and only Sports Utility 4x4 Vehicle (SUV) available in Pakistan

12 seat commuter van — 2600 cc Hyundai grace commuter van:

DFML started its business activities with the launching of its Completely Built Up (CBU) 12 seated Grace Commuter vans in April 1999. These luxury vans are well accepted by both individual and corporate customers, mainly because of their superior quality, comfort, and highly competitive prices. It is also the market leader in it category.

 

1-ton pickup — 2600 cc Hyundai shehzore:

 The company launched its first locally assembled 2600cc 1.0-ton pickup Hyundai Shehzore in September 1999. This vehicle has already acquired market leadership for the second consecutive year in the LCV 1-ton pickup market with approximately 60% market share.

Compact sedan — 1300 cc Kia classic / ngv:

DFML launched 1300 cc locally assembled KIA Classic on February 2000. Kia Classic has been well accepted by the Pakistani customers due to its high Value For Money (VFM). A bi-fuel CNG variant of this car Kia NGV fitted with purpose built Italian CNG kit and specially designed cylinders is also being offered to the cost conscious customers.

Economy car — 1000 cc Hyundai santro club:

A product that has most advanced and latest technology is Santro. It is the 1000cc, 4 cylinders, 12 valve Multipoint Electronic Fuel Injection (EFI). Santro is more than just a car, it communicates the mood, portrays the status, its agile performance and nimble handling combined with its now famous fuel efficiency makes it the best buy in its class. More than just another small car, Santro has an added dimension of versatility due to its unique design, spacious interior and a friendly disposition suitable for individual lifestyle or for family use providing best value for money.

It has got everything a smart family needs these days. To name a few, Santro has the price affordability, fuel efficiency & low maintenance cost to meet small budget, instrument panel within convenient reach of the driver, a stereo to suit your acoustic needs, quiet air-conditioning, spacious trunk, alloy wheel, stop & fog lights, etc. and many more.

Luxury Sedan Car — 1500 Cc Spectra:

Spectra boasts an impressive 1500 cc, EFI in-line 4 cylinders, 16-valve, DOHC engine, with manual and automatic transmission options. It offers noiseless drive with unmatched comfort & safety. This car has an exceptionally strong road grip, good pickup and glides even on rough surface. Spectra offer unmatched space & creature comforts of much expensive Japanese origin cars at an incredibly affordable price.

4x4 sports utility vehicle — 2000 cc turbo-diesel intercooler grand Sportage:

The latest addition to DFML's product lineup is Grand Sportage. Due to its winning qualities, it is doing outstandingly well in all the markets by appealing to the broadest demographic segment possible. It has not only provided an upgraded path for existing car owners, but with its bold, unique styling and superb performance it has also attracted new buyers who have previously never considered purchasing a SUV.

It is the first Sports Utility Vehicle (SUV) to be assembled in Pakistan. The introduction of Grand Sportage has marked the beginning of a whole new chapter of grand motoring in Pakistan.

It is powered by sophisticated 2.0 liter, Turbo intercooler diesel engine. It has flexible seating, strong ladder frame body design, sophisticated double wishbone at front and 5-link coil spring rear suspension to deliver a remarkably smooth car like ride and handling. This suspension system is equally suited for on-road and off-road driving conditions while providing a ride comfort akin to luxury passenger cars.

Cng vehicles:

Kia Classic and Spectra have also been introduced with dedicated design / purpose built factory fitted CNG fuel system. The bi-fuel CNG system provides flexibility of operation on gasoline or CNG with utmost ease and convenience combined with economical and ecological advantages. Both the products have been well accepted in market.

 

3s dealership network:

DFML, in order to provide complete After sales support to the customers, has established a nationwide dealership network of 22 Hyundai-Kia 3S (Sales, Service and Spare Parts) dealers, under its roof.

The Central Parts Depot. Located at Karachi is the nerve center of supplying Hyundai and Kia spare parts throughout Pakistan.

DFML's state-of-the-art factory:

Dewan Farooque Motors Limited has one of the most advanced automobile assembly plants of South East Asia. Located in Sajawal, Thatta, 152 Kilometers from Karachi was built in a record time. The plant stands on a 40-hectare plot and has been built with an initial investment of more than Rs.1.8 billion. Its unique feature include, inter-alia, the provision of high standard of living accommodation for all categories of employees, the availability of land for expansion of production facilities, and the in-house generation of electric power. It has a production base of 10,000 units p.a. on a single shift basis.

The plant is first automobile manufacturing unit in Pakistan to be independently invested by 100% Pakistani investors. The groundbreaking ceremony for the plant was held in August 1999, and the first pilot Santro was ready in a record-breaking time of 6 months. Today the modern state-of-the-art plant is rolling out cars every day. This is the first automobile assembling plant in Pakistan with the state of art robotic equipment.

A) BODY SHOP:

Spread over an area of 8,400 square meters, the Body Shop is equipped with the most modern welding equipment and automatic type jigs & fixtures from Korea.

The well-trained and experienced manpower is making the best use of the available equipment and is practicing up-to-date production and quality control techniques to produce highest quality vehicle bodies here.

B) ROBOTIC PAINT SHOP:

The Paint Shop is a combination of excellent engineering know-how and design with the most efficient German and Korean equipment.

The plant has a state of the art CED paint shop from Shindurr. Shindurr has German technology and has constructed number of CED paint shops in Europe, Far East and Asian countries. The Cathodic Electro Deposition (ED) System provides durability to the body and protection against rust.

The facility also includes high-speed integrated setup of Robots to provide unprecedented paint quality. Painting Robots are supplied by DURR-BEHR of Germany, the most technologically advanced name in the world for such equipment, are being used to paint the vehicle bodies for the first time in Pakistan. This is the first Automobile assembling plant in Pakistan with the state of the art Robotic Equipment. The use of robots results in the production of evenly sprayed, high gloss, defect-free and high quality painted bodies.

C) ASSEMBLY SHOP & INSPECTION LINE:

The combination of the conveyors provided by SEOKWANG of Korea, and the ANDON System installed throughout the shop provide efficient communication and better control of production activities.

The tester line, with high precision equipment from Iyasaka - Korea, is employed to test and adjust the vehicles in order to ensure defect free and highest quality output. Exhaust gas analyzers are also used to ensure that environment friendly automobiles are rolled-out from the factory.

TOTAL CUSTOMER CARE:

Dewan Farooque Motors Limited strives to serve its valued customers. The in-house Customer Care & Training Departments has been instrumental in conducting various seminars and workshops for developing professional skills and techniques for effective customer handling to provide high value products and services to customers and to ensure highest level of customer satisfaction.

DFML — AN AGENT OF CHANGE IN THE AUTOMOBILE INDUSTRY:

Ever since its entrance into the automobile arena, DFML has proved to be an agent of change. During the last two years, the automobile market has undergone a transition with many new product introductions and healthier competition. The well-entrenched Japanese assemblers have also reacted to the changed market scenario, which is increasingly becoming a supplier's market rather than a buyer's market.

Support And Service

Dewan Farooque Motors a progressive automobile company with diversified range of vehicles catering all the transportation needs of Pakistan with state of the art technology and industry standards in east & west. DFML followed the lead of those companies and selected products accordingly to be leaders in automobile industry by providing options of Hi-Tech vehicles.

Dewan Farooque Motors is heading forward with 3S concept to cater the need of our most appreciated Customers who not only believe in us but also love our products. To provide the best of the best after sales service we have defined new standards & new ingredients for 3S, exclusive only to DFML dealership network are 3S (Speedy, Secure, Sweet) service facilities.

Recently the concept of vehicles service has change from making profit from repairs & maintenance to the creation of referral sales by studying Customer Satisfaction, Loyalty & Customer needs. Therefore the objective of Dewan Dealership network is to construct sweet service system of Customer Satisfaction, for this DFML dealers are to provide customers with both the satisfactory services for the proper use of their vehicles and maintenance to keep them at the best condition.

To make it come true, the Service teams of DFML & Dealerships have enough technical capability to give customers confidence in after sales service, and also have a high level of customer handling capability to give customers a good impression. In other words, all the service staff of DFML & Dealership will & do work for customer's satisfaction in mind.

Customer's trust in our Service teams will be accomplished only after our Service teams possess the necessary abilities of repair/maintenance, customer handling, and knowledge on warranty and good attitude to the customers.

Service Trainings:To maintain & to achieve the best possible customer satisfaction DFML has a basic policy & major elements are continuous grooming of its dealership technicians.

  • In House Trainings at Dealership
  • On Job Trainings (OJT's) at Dealership & DFML Training Center
  • Technical Service Trainings at DFML Training Center.

Service Clinics:

  • Enhance customer satisfaction and trust in DFML products.
  • Generate customer's awareness regarding the importance of quality service performed at DFML Dealership network.
  • Educate customers on preventive maintenance.

 

Special Services Tools (SST): 

 

 

 

All DFML dealers have Special Service Tools, which are indispensable for disassembly and reassemble of Hyundai & Kia vehicles in service to satisfy the customers. This also enables technicians to be more proficient in repairing DFML products.

 

 

Hi-Scan Pro:

 

With all vehicle's computer controlled complexity, today's cars require more than a normal toolbox to keep them running smoothly. Computer controls and a vast array of sensors require today's technicians to have access to all of that information going on inside the car at a dealership, that is why every DFML dealership has a HI-Scan Pro for Hyundai & Kia.

Hi-Scan Pro controls operation of all diagnostic System components and integrates data from the all sources to assist the technician in the identification, isolation and repair verification of automotive electronic faults. The Hi-scan pro that is the heart of electronic diagnosis provides the user interface to the system and data integration and processing.

The function of Hi-Scan Pro is as follows:

Diagnostic Trouble Codes:

Display all DTC for the selected ECM and erase DTC.

Current Data:

Display Current Sensor Values.

Flight Record:

Record Current Sensor Values up to 8 items at once.

Actuation Test:

Allow each actuator to be forcibly driven by Hi-Scan Pro.

Simu-Scan:

Display current data with direct sensor simulation and meter test simultaneously.

Other Functions:

Freeze Frame Data and CARB OBD-II.

Diagnosis Support function:

Parts Analysis (Engine/Auto Transaxle), Oscilloscope, Multi Meter Actuator Driving and Sensor Simulation.

PLANT & MACHINERY

 

IMPORTED MACHINERY

Imported machinery and equipment comprises of:

¶ Pre-treatment and lease coating equipment

¶ Panel

¶ Heat Exchanger

¶ Spray Booth

¶ Drawing Oven

¶ Conveyor And Hoist Controlled Equipment And Panel

¶ Mearing And Checking Machines

¶ Inspection, Testing And Controlling Equipment

¶ Pneumatic Tools

¶ Spot Welding Equipment

¶ Air Compressor Generator, etc.

 

LOCAL MACHINERY

 

Local procured machinery was comprised of:

¶ Conveyors overhead crane

¶ Vehicle testing equipment

¶ Generator sets

¶ Jigs and fixtures

¶ Welding equipment cables and electrical fittings

¶ Air compressor

¶ Telecommunication system

¶ Computer equipment

¶ Fire fighting equipment, etc.

All local procured machinery was brand new as, well.

MANAGEMENT

 

BOARD OF DIRECTORS

 

Chairman Mr. Dewan Zia ur rehman farooqui

Managing director Mr.Dewan Mohammad Yousaf Farooqui

deputy director Mr.Dewan Abdullah Ahmed

Directors Mr.Dewan ghulam Mustafa khalid

Directors Mr.Dewan Abdulrehman Farooqui

Directors Mr.Dewan M.Ayub khalid

Directors Mr.Dewan Asm Mustafa Farooqui

Chief Executive Mr.Dewan Mohammad Yousaf Farooqui

 

WORKING DEPARTMENTS OF DFML

 

DEPARTMENTALIZATION

 

"It means the process of grouping related work activities into manageable units is called departmentalization."

Departmentalization is being very common in every organization as it facilitates the working of the organization.

 

DEWAN FAROOQUE MOTORS LIMITED

 

 

 

 


WORKING DEPARTMENT OF DEALERSHIPS

 

 


Sale ServiceSpare Parts Customer’s Satisfaction

 

 

DEALERSHIP NETWORK

 

The groundbreaking concept of a synchronized dealership network setup by DFML has revolutionized automobile marketing in Pakistan. The motivation behind this concept is to provide the best help to the customer. This innovative concept revolved around the “Kia & Hyundai Dealership” which encompasses three critical areas, all under one roof.

These are:

¶ Sales

¶ Services

¶ Spare parts

In Pakistan, 38 such dealerships have been setup, with the latest facilities, repair equipment and machinery, managed by highly skilled and training individuals, in order to provide the customer a hitherto unknown level of service.

 

 

  

STRATEGIC ANALYSIS

 

ENVIRONMENTAL SCANNING

 

Because of the continuous change in environment, there is an element of uncertainty in the environment. The environment has become highly complex and dynamic. Keeping this thing in mind, a company must look for a strategic fit between what the environment wants and what the company has to offer, as well as between what the company needs and what the environment can provide. That’s why before an organization begins to formulate strategy, the management must screen the environment and identify external environmental factors, which affect the organization.

The environmental variables are as follows:

1) Economic forces

2) Politico-legal forces

3) Technological forces

4) Socio-cultural forces

 

ECONOMIC FORCES

Economic factors are those, which regulate the exchange of material money, energy and information. Following economic variables have affected the automobile industry as well as DFML.

 

INFLATION

Inflation means, “Average rise in prices of commodities”. According to Economic Survey of Pakistan, the inflation rate in Pakistan is about 9%. The main reason of this rising trend is devaluation of currency by the State Bank of Pakistan.

.

Due to this turn by turn devaluation, the input costs have increased and DFML has been affected by these devaluations because the main component CKD it (Complete Knocked Down) unit is imported from Korea that amounts to 75% of the cost of total assembled car.

 

EFFECT ON PURCHASING POWER OF PEOPLE

Due to inflation, the purchasing power of people has also decreased and buying behavior has resulted in significant decrease in the sale.

 

TAXATION

 

Government tax policies have severely affected the auto industry. Though the Government reduced the Sales Tax from 18% to 15% and abolished 2% pre-shipment inspection charges, but duty on CKD kits remained high affecting production cost and CVT (Capital Value added Tax) continued to hamper smooth working of industry, also DFML. Presently, the CVT rate is 6.25% (both for tax and non-tax payers). The government announced import duties at the rate of 25% to 35% but all these measures affected DFML as well as the industry. The CVT rate though party rationalized, was still not sufficiently favorable to stimulate increase in sale.

 

 

DEMAND TO GROW IN LINE WITH GNP

Vehicle demand in the country has posted a CAGR of around 7% over the last ten years with a forecast average GDP growth rate of 5% per annum over the medium term, in line with its long-term historic growth. They expect demand for cars to grow at a little under 5% per annum over the same period. Pakistan has one of the lowest numbers of vehicle per capita among the developing world and therefore, offers a lot of room for demand growth. Slower forecast growth in the upper segment market of only 5% per annum is indicative of the tougher competition ahead for Indus and other manufacturers of larger engine cars.

POLITICAL AND LEGAL FORCES

 

LAW AND ORDER

 

According to sources from DFML, the state of economy is far from satisfactory Law and order situation is adversely affecting the company. The law and order especially in Karachi, is adversely affecting production, as far as the demand for new vehicles is concerned.

 

SMUGGLING

According to sources from DFML, the presence of smuggled cars in the market is affecting the vehicles sales, and also the government's recent policy to legalize these cars as short-term strategy for revenue collection to meet the IMF dictated revenue collection target of Rs. 305 million, will hurt the industry in 11 years to come. Though, exact number of smuggled cars, those; on roads' with fake registration numbers or without any registration at all and those piled up on and around Pakistan's borders especially with Afghanistan, in Baluchistan and NWFP,

For an entire car industry which is producing only about 45,000 cars on average per year, the legalization of the smuggled cars will cause an indispensable damage to it..

 

POLITICAL INSTABILITY

 

Not only DFML is suffering but also overall industry is suffering from the political instability in Pakistan. This political instability has acted like threat to the industry because of inconsistent policies of taxation, tariff and regulating duties.

Also, political instability in Afghanistan has caused the loss of opportunity for DFML to export the vehicles to Central Asian countries. The reason being that Karachi is the nearest port to Central Asian countries.

 

TAXI SCHEME

The after-effects of Yellow Cab Scheme are still being felt because 3,000 taxis are still present in market, waiting to be sold.

 

TECHNOLOGICAL FORCES

 

Technological forces make problem-solving inventions. This is very important factor, you have to assess that how you made advancement in technology. DFML is making new technological change in its cars. Keeping in view the environmental conditions.

 

 

DELETION TARGET

Deletion policy is what number of parts and spares will be manufactured locality through vendors. It is actually that "how much the car is localized". Engineering Development Board of Pakistan sets this deletion policy. It gives a specific deletion target (either companies specific or industry specific to the companies in the automobile industry. The industry specific deletion policy (instead of company specific deletion policy acts as an entry barrier for the new entrant in the automobile industry).

An industry specific deletion program requires fixation of a minimum level market for all firms in the same industry based on the previous year achievement and target for the maximization level of deletion. Thus new industrial units have to start from the level of deletion already achieved in that industry. The Industry Specific Deletion Program (ISDP) therefore requires new entrances to start at that deletion levels that have already been achieved in the industry. This policy discourages the new entrance with the result that a monopoly situation has been created with absolute domination of Japanese vehicles..

 

CAPACITY

 

In case of DFML, its overall capacity 20000 units per year, but it is presently operating at 8000 units per year.

According to DFML Comral1y sources, during the next year they will double their production up to 20,000 units per year, which. Reduces their per unit cost. Hence in the short run the company probably will produce more than market demand at the current price and may reduce its price hoping that it can recoup its cost from a greater number of sales, within the country as well as outside the country.

THREAT OF SUBSTITUTION

 

In effort, all corporations within an industry compete with firms in other industries that produce substitute products. Substitute products appear to be different but can satisfy the same need as another product.

In case of DFML, the substitute of its products Pak Suzuki Motors Company. It has posed and posing a great threat to DFML because of following reasons.

1. Suzuki Motors Company established in 1984 and since localized its cars by about 60%. Its CKD kit cost is 62% of total production cost. It is preparing its motor car up to 800cc and 1300cc, because of highly localization percentage the price of its car is less than the ones serving upper segment are market.

2. In the future, the market for smaller sized engine cars is expected to grow at about 5% per annum.

3. it is also believes that the lower projected growth will likely limit DFML’s target market over the next three years.

 

BARGAINING POWER OF SUPPLIER

 

Suppliers can affect an industry through their availability to raise prices or reduce the quality of purchased goods and services.

The Industry specific deletion policy will cause an increase in number of vendors end will result in the existence of strong vendor industry but until the vendor industry does not exist in appropriate size, the existing vendor will exhibit their powers to bargain their cost of services.

Moreover, for DFML, the vendors work at an established rate, that only vary in prices whenever inflation take place.

They give incentive to their vendor supplier to reduce their bargaining power. The incentive may be in the form of training in Korea and also can be monetary terms.

According to Jay Barney "‘the study of sustained competitive advantage depends in a critical way, on the resources endowments controlled by a firm.

It is very important for the organization to develop a strategic fit between capability and their resources in changing environment, Resources are only one of several influences on company policy and in cer1.ain circumstances may have first class resources, which are fully exploited and controlled but be operating in highly depressed and unprofitable market.

It is very important for the organizations to identify their resources, what resources they have for achieving their goal, it is called resource audit. The following factor involve, the resources that DFML is employing:

¶ Marketing

¶ Human Resource

¶ Technology

¶ Finance

MARKETING AS A RESOURCE

 

Product which company offers is also resource of company. Larger the product mix, greater will be return on sale of product. DFLM company has analyzed needs and wants if its customer and has made available a broad product range to suit their need. All the cars in its product range are a beautiful brand of style, economy and technology. Now they are going to increase its product range by introducing new models of kia and Hyundai cars in year 2004 that also possess all the qualities, which its all the cars have.

.

 

CHANNEL OF DISTRIBUTION

 

DFML has a manufacturer-sponsored retailer franchise system. They license dealers to sell the cars. The dealers are independent business people who agree to meet various condition:, of sales and service.

In this context, they have established a network of 39 dealers all over the country.

The groundbreaking concept has revolutionized automobi1e marketing in Pakistan. The motivation behind this concert is to provide the best help to customer, according to its corporate phi1osophy customer satisfaction.

This innovated concert revolves around the "Hyundai & Kia Dealership", which Encompasses three critical areas; sales, services and spare parts all under one roof.

All the 39 dealerships have been sent up with latest facilities, repair, equipment and machinery, manned by highly skilled and trained individuals, in order to provide the customers, a higher to unknown level of service. The dealership has already access to genuine spare parts.

 

PROMOTION

 

Modern marketing demand more than just develops a good product, pricing attractively, making it available to target consumer.

So total marketing communication program also consist of advertising, personal selling, ales promotion and public relation tools.

 

ADVERTISING

 

Since company has develop the market of its product to such extent that they have not to advertise to the extent the competitors do. They are extending their market through electronic media, newspaper banners and boarding.

 

PERSONAL SELLING

 

DFML has appointed very trained experienced sales people in a large number so they can observe the needs of customer and make quick adjustment.

 

AFTER SALE SERVICE

 

After sale service is very important aspect of the DFML. DFML continued the dealership and fun within the company. The establishment of a "customer relation tell" and the ongoing programmer for training to their dealership, staff have resulted in improved service to their customer the uninterrupted availability of spare parts at reasonable prices throughout the country .

In recognition of their achieving a higher standard of "after sale service" in Pakistan Toyota Motor corporation of Japan has presented the company its "Good performance award" which places Pakistan in the highest category.

 

PRODUCT QUALITY

 

Developing a product involves the benefits that product will offer. In there benefits and attributes the product quality level sports products position in the target market product quality stands for the ability of a product to the perform its functions.

Indus Motors has set up one of the most modern automobile manufacturing plant in its region.

Quality of product has not been compromised with and very heavy investment has been made to build its production facilities based on state of the art technologies.

The whole body shall of the car is dropped into tank containing 75 tons of point which is deposited electrochemically onto the body.

The welding line utilizes a fully automatic process control cycle for consistent quality and energy saving.

 

PRICING

 

Simply defined, pricing is the amount of money charged for a product of service. Price is the only element in marketing mix that produces revenues.

All other elements represent costs. There are many factors that affect the pricing policies of company.

 

COST

 

Costs set the floor of the price that the company can charge for its product.

The major component of their component of their cost is CKD kit, which is about 60of its raw material.

AREA OF PRODUCTION

 

FAVORABLE LOCATION

 

A favorable location indicates the strength of an organization; the essence of favor ability is that whether the plant is located at a place, which is near to the supplier (or not).

 

The plant is located at very favorable place; the port is near to it. The general Tire Company is near to it from which it gets the tires for its cars and save transportation cost. Though some of vendors are also located in Lahore. But most of its vendors are located in Karachi.

 

TECHNOLOGY

 

The kind of technology employed by an organization gives an important edge in terms of quality. Technology is of two types: labor intensive and capital intensive (state-of-the-art technology, for example). In case of DFML, the company has installed capital-intensive technology. They are using conveyer belts to transfer a car during assembling from are station to another station. They have heat exchanger, spray booth, drying tower, etc.

For measuring and checking of locally manufactured parts in order to maintain quality standard and to assist vendors in product development, a state-of-the-art Quadrant Measuring Machine was installed in 2001.

The company acquired new computer technology for the implementation of software and its applications, which provides a centralized database support integration between Manufacturing and Financial systems, and is assisting the company in providing meaningful data in time for management decision making.

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