HinoPak Motors (Pvt) Ltd

Presented By: M Shakir Mukhtar

Company Profile
Formed in 1985 Hino Motors Limited, Toyota Tsusho Corporation, Japan, AlFuttaim Group, UAE and PACO

Market Leader in Bus and Truck Segments

76% in bus, 53% in Medium trucks and 49% in light-duty truck Current Sales : Rs. 389 Mn

Industry Background
82 vehicle assemblers

Employment : 192,000
Total investment : Rs.98 billion

Contributes $3.6 billion to the economy

Annual foreign exchange savings of over $ 1 billion

Truck segment Growth : 13%

Bus segment Growth : -7%

Vision, Mission Statement

Vision Total Customer Satisfaction, a set vision for the company. In pursuit new concepts have been introduced such as a mobile workshops, 3S/2S dealership facilities, and training and free service camps for the vehicle owners and drivers. Mission The mission of Hinopak Motors Limited is to provide the society with safe, economical, comfortable and environment friendly means of transportation by manufacturing and supplying commercial vehicles and services".

Internal Environment Analysis

Market leadership Largest installed production capacity in Pakistan Kaizen and The Toyota Way concepts and processes Excellent product support and after sales service Under utilization of production capacity Ineffective lobbying Dependence on imported components Lack of skilled labor

External Environmental Analysis

Demand for CNG and fuel efficient buses Export potential to Saudi Arabia and African countries Gawadar Port New entrants (Tata Daewoo, Photon) Rising fuel prices Import of Chinese, Indian and smuggled buses

Financial Highlights
2004 2005 2006 2007 2009 2010

Sales - Net Gross Profit Operating Profit Profit / (Loss) after Tax

5,521.80 6,367.61 6,392.28 7,826.78 12,151.02 11,127.55 770.09 509.40 335.73 661.51 435.06 242.96 834.58 1,387.64 1,279.14 560.18 323.88 967.78 590.05 794.35 69.92 389.48 15.29 -148.07

Total Net Assets

1,386.37 1,527.56 1,797.75 2,238.83 1,989.99 1,857.56

Issued, Subscribed & Paid up Capital Reserves / Accumulated Profit Long Term / Deferred tax Liabilities

124.01

124.01

124.01

124.01

124.01

124.01

900.10 1,043.51 1,298.84 1,764.55 1,544.04 1379.97 60.01 63.64 84.36 65.59 44.44 81.79

Financial Analysis
2004 Financial Ratios Gross profit ratio Net profit margin Return on Assets Return on Equity Debt equity ratio Current ratio Quick ratio Interest cover ratio Dividend payout ratio Price earning ratio Total assets turnover ratio Fixed assets turnover ratio Inventory turnover ratio 13.95% 6.08% 10.00% 32.78% 0.05 1.34 0.46 52.79 31.40% 5.95 1.62 8.09 3.11 10.39% 3.82% 7.70% 20.81% 0.05 1.42 0.31 8.13 30.60% 8.58 2.01 7.64 3.19 13.06% 5.07% 7.80% 22.76% 0.05 1.39 0.36 11.57 40.20% 5.90 1.54 7.39 2.66 17.73% 7.54% 12.00% 31.24% 0.03 1.50 0.54 15.32 50.44% 12.57 1.59 8.79 2.62 10.53% 0.58% 1.40% 4.19% 0.02 1.34 0.53 1.17 31.04% 50.13 2.43 12.74 4.42 3.50% -1.33% -2.58% -9.85% 0.05 1.23 0.47 0.1
-14.75 1.94 12.08 4.02

2005

2006

2007

2009

2010

Major Problem
Forex Risk of Raw Material Import Decreasing Availability of CNG High Oil and Diesel Prices

Minor Problem
Resistance to Technological Change Technical Competence of the recruits

Resignation to environmental factors

Need for Young Blood Lack of willingness for personal growth Sense of insecurity amongst workers

Strategic Alternatives
involve workers at all levels of the strategy formulation process

Strategic Choice
Involve workers at all levels of the strategy formulation process. Sense of mission and ownership for the organization.

Utilize their full potential for the achievement of the organizational goals.

Strategy Implementation & Execution

start a communication campaign attractive markets such as Saudi Arabia and the African countries