Dewan Farooqi Motors Limited
DEWAN AMBITIOUS Dewan Farooque Motors Limited Business Report Submitted By: Muhammad Adeel Shaikh Subject: Introduction to Business Topic of Report: DFML Business Report Submitted to: Prof. Mazhar Ali Submitted on: 20th April 2010 Business Profile: Business Name: Dewan Farooque Motors Limited Location: Hyundai New Town Motors, University Road, Karachi-74800, Tel# 021-4949898. Table of Contacts ————————————————- S. No Contents Page No. 01.
Executive Summary …………………………05 02. Introduction …………………………06 03. History of DFML …………………………. 07 04. DFML … ………………………. 08 05. DFML Philosophy …. …………. ………….. 09 06. Mission Statement … ……………………….. 10 07. Human Resource …………………………. 10 08. Location & Facilities …………………………. 1 * Production Capacity ……………………11 * Product Range ……………………12 * State of the art factory ……………………13 * Body Shop …………………. …13 * Robotic Paint Shop ……………………14 * Total Customer Care ……………………14 * Hi-Scan Pro ……………………14 09. Channel of Distribution …………………………15 10. Product Promotion …………………………16 11. Strengths …………………………17 12.
Weaknesses …………………………18 13. Threats …………………. ………19 14. Recommendation …………………………20 Executive Summary In Pakistan Toyota, Suzuki, Honda, Nissan, and Dewan Farooque Motors (DFML) are the main key player in automobile industry. In starting Toyota, Suzuki and Honda are the main players now DFML also capture a great part of market share in automobile industry of Pakistan. DFML is producing the products of two famous Korean companies KIA MOTORS and HYUNDAI MOTORS.
DFML is a joint venture between the Dewan Mushtaq group of Pakistan Hyundai motors limited Korea and Kia motors Korea. DFML was incorporated on December 17, 1998. It is situated at Dewan city Sajawal 152 km away from Karachi. Its annual capacity is 20,000 units per year, expendable to 40,000 units per year. The political and legal forces, poor law and order situation, especially in Karachi not only affect the country and that is also not good for working environment for the organization. DFML goal is to become the largest automobile industry in Pakistan and serve their customers to give them complete satisfaction.
Introduction This report is about the Dewan Farooque Motors Limited business (DFML). That how they enter into this automobile industry in Pakistan and how they become one of the main key players in automobile industry. What are the future plans focuses by the organization, how they manage their work, what facilities they are providing to their customers. Basically this report is about how DFML is running their whole business. History of DFML In 1968, the Dewan Family, under the leadership of Dewan Mohammad Umer Farooque with the supported by his younger brother, Dewan Salman Farooque, decided to enter the industrial arena.
In 1970 they start their first industry named Dewan Textile Mills Limited. The Group further invested in many other businesses and start increasing their group very fast. Some of the main Dewan group industries are: * Dewan Salman Fiber Limited * Dewan Sugar Mills Limited * Dewan Textile Mills Limited * Dewan Khalid Textile Mills Limited * Dewan Mushtaq Textile Mills Limited * Dewan Farooque Motors Limited The Dewan group decided to invest in automobile industry in Pakistan. In December 1998 named Dewan Farooque Motors Limited they enter in the market.
In the same month they reach two major mile stones: first the signing of Technical License and Exclusive Distributor agreements with Hyundai Motor Company, Korea’s and second signing the Technical Collaboration Agreement with KIA Motors Corporation of South Korea. Dewan Farooque Motors is now a key player in the automobile industry of the country offering an impressive lineup of passenger cars and commercial vehicles. Now plant has a capacity of 10,000 vehicles per annum on single shift basis and is equipped with the latest facilities, which include Cathodic Electrocoat Deposition System (CED) paint system and robots for the final coat.
DFML 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. 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 has entered into separate technical license and 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 nd 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 ‘Santro Club’ launched in October 2002 has been very encouraging and this has enhanced capacity utilization and profitability of the Company. Hyundai Shehzore in the 1-ton Pickup Truck take over 60% of market share in the same category of trucks sales all over Pakistan. To full fill the demand of spare parts of the Hyundai/Kia the Company has appointed authorized parts jobbers.
This strategy will meet customers’ requirement of after-sales parts. In order to improve and upgrade the technical skills of service staff, DFML conducted 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. DFML 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. Mission Statement The mission of DFML is to be the finest Organization, and to conduct business responsibly in a straightforward way. 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. HUMAN RESOURSE DFML human resource objective is to create an environment which motivates its work force and they establish a platform which provides knowledge and skills to its employees. The process of hiring employ is very simple first they advertise for the required post in news papers with the all specification they are looking for then an interview set for further process. If they hired someone they also give him training for make his skills sharper and to eliminate mistakes.
LOCATION ; FACILITIES The production facilities are located at Dewan city Sajawal 130 km away from Karachi on land measuring over 105 acres. High quality metallic road to the factory site is available along with other infrastructure facilities provided by authority. This area consist these different department: * Paint Shop * Assembly Shop * Welding Shop * Compressor Transformer Room * Guard Room * Internal Roads * 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 * 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. The products which DFML is dealing in right now are: * 12 seat commuter van – 2600 cc Hyundai grace commuter van. * 1-ton pickup – 2600 cc Hyundai Shehzore. * Compact sedan – 1300 cc Kia classic. * Economy car – 1000 cc Hyundai Santro club. * Luxury Sedan Car – 1500 Cc Spectra. 4×4 sports utility vehicle – 2000 cc turbo-diesel intercooler grand Sportage. * CNG vehicles – Kia Classic and Spectra. * STATE OF THE ART FACTORY: Dewan Farooque Motors Limited has one of the most advanced automobile assembly plants of South East Asia. The plant is first automobile manufacturing unit in Pakistan to be independently invested by 100% Pakistani investors. The opening ceremony for the plant was held in August 1999, and the first 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. The facilities which they are providing to their customers are as follows: * BODY SHOP: The Body Shop is equipped with the most modern welding equipment and automatic type jigs ; fixtures from Korea. 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. * ROBOTIC PAINT SHOP:
The Paint Shop is a combination of excellent engineering know-how and design with the most efficient German and Korean equipment. They are using the CED system to provide durability to the body and protection against rust. * TOTAL CUSTOMER CARE: DFML 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. Hi-Scan Pro: 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 that is why every DFML dealers has a HI-Scan Pro for vehicles. 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 conditions 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. PRODUCT PROMOTION Modern marketing demand more than just develops a good product, pricing attractively, making it available to target consumer. So the techniques used by the DFML to attract customers are: * ADVERTISING: They are promoting their products by advertising through electronic media, newspaper, banners and boarding. * PERSONAL SELLING: DFML has appointed 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. The establishments of a “customer relation” and the ongoing programmer for training to their dealership, staff have resulted in improved service to their customer. 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. STRENGTHS * One of its strength is its location is near to Karachi. Most of its vendors are located in Karachi.
So DFML saves a lot of transportation cost. * DFML has installed latest technology in its plant, which is almost computerized. It is also strength for DFML. * DFML has set up a paint system, which is considered no 3 in Asia. * DFML have a wide product range, which satisfy each and every segment of market. * DFML, Labor force is also its strength, which is efficient and well trained. * Easy availability of genuine spare parts and its resale value act as its strength. WEAKNESSES * DFML has not yet achieved appropriate economies of scale as compared to its competitors. DFML has total capacity of 20000 units. But at present they are producing 8000 units, this shows that they are not fully utilizing their capacity. * Their dealership network is weak. Company does not own this dealership network. * All major decisions are made in Korea by the holding company, they send instruction about their decisions in Pakistan and this process delays the policy making at corporate level by the top management. THREATS * The government tax policies are threat to DFML. They have to pay 35% import duty on CKD kit which is the main component of the cars. The law and order situation in the country especially in Karachi is threat to DFML. * The political instability is also a threat to DFML as well as overall automobiles industry. Due to political instability policies about tax and import duties are inconsistent. * The 1992’s taxi scheme has acted and is still acting as a threat to DFML. During 1990 Government imported sixty thousands” yellow cabs” from Korea, which resulted in decrease in demand of DFML vehicles. Still three thousand yellow cabs are waiting for sale in the market. Suzuki, Toyota and Honda cars are the threat for DFML. * The increasing inflation is acting as a threat to DFML. * Exchange rate fluctuation is also a threat to DFML Devaluation of Pakistani rupee has acted like a threat to the company. Recommendation The recommendation for DFML in over opinion is they have to market their product in more advance manner used of internet is one of the best solution and they have fully equip plan here they can also introduce their own car models with unique designs by that they can increase their revenue. 000 cabs which are is waiting list they can repaint them and with adjustment they can able to sell them easily in market. They also have to improve their vehicles looks, design and colors to attract more customers. They have too much space on their site they can set up a new plan which can make CKD kit which they have to import for Korea by this their taxation amount reduce.
