hinopak motors (pvt) ltd

HinoPak Motors (Pvt) Ltd

Presented By: M Shakir Mukhtar

Company Profile• Formed in 1985

• Hino Motors Limited, Toyota Tsusho Corporation, Japan, Al-Futtaim 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. Inpursuit new concepts have been introduced such as a mobileworkshops, 3S/2S dealership facilities, and training and freeservice camps for the vehicle owners and drivers”.

• Mission“The mission of Hinopak Motors Limited is to provide thesociety with safe, economical, comfortable andenvironment friendly means of transportation bymanufacturing and supplying commercial vehicles andservices".

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 Highlights2004 2005 2006 2007 2009 2010

Sales - Net 5,521.80 6,367.61 6,392.28 7,826.78 12,151.02 11,127.55

Gross Profit 770.09 661.51 834.58 1,387.64 1,279.14 389.48

Operating Profit 509.40 435.06 560.18 967.78 794.35 15.29

Profit / (Loss) after Tax 335.73 242.96 323.88 590.05 69.92 -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 124.01 124.01 124.01 124.01 124.01 124.01

Reserves / Accumulated Profit 900.10 1,043.51 1,298.84 1,764.55 1,544.04 1379.97

Long Term / Deferred tax Liabilities 60.01 63.64 84.36 65.59 44.44 81.79

2004 2005 2006 2007 2009 2010

Financial Ratios

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

Financial Analysis

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