SPLITTER BIKE

SPLITTER BIKES Pvt.(Ltd)

COMPANY SUMMARY

Splitter is a new-based company, which will provide affordable and quality

cng bikes through out Punjab and other main cities of Pakistan with the

help of Punjab government

COMPANY OWNERSHIP
Splitter Company is a partnership-based company with Punjab government
OWNERS:

MR. Waqas Daud

MR. Rizwan Khawer

MR. Salman Qureshi

MR. Waqas Younas

MR. Uwais Mukhtar

LOCATION
We are operating at Raiwind road Lahore near lake city.

Our head office is located at Jail road Lahore.

Products & services
We are providing a 100cc CNG bike with easy maintenance and convenient

availability of spare parts.

SPECIFICATIONS:
Displacement (ml): 124

Axle base (mm): 1200

Max loading (kg): 170

Max speed (km/h): 90

Net weight (kg): 112

Engine: CNG tank 4-stroke

Ignition: CDI

Starting system: Electric/Kick-back starting

Brake: (F) Drum, (R)Drum

Tire size: 275-18(front) 300-18(rear)

Engine type: 100CC

The tanks store a total of 3 kg of natural gas.

This is supplied by manufacturer Ecopos, based in

Santa Fe, Argentina

We are also providing after sales services which includes free tuning after

1000 km and than after 3000 km.

We will conduct surveys to measure customer’s satisfaction.

(http://indianautosblog.com)

SUPPLIER
We are importing parts of bikes from CHINA.

Laws, Taxes & Rebates:

All the bikes made in Pakistan should comply with international

environment standards. The Emissions Control Law requires less than 19%
lead content in smoke emitted by the motorbikes. The noise pollution is also
looked into - the noise produced by a bike should not exceed 78-deci bell.
There is an authority namely Pakistan Standard and Quality Control
Authority (PSQCA) which oversees all these aspects. While there is a parent
authority by the name of Engineering Development Board (EDB) which
comes under the Ministry Of Industries which looks over the entire
motorcycle production in Pakistan.
There are three types of taxes and duties imposed on the motorcycle
manufacturers in Pakistan:

Sales tax 15%

Surcharge 5%
Insurance 1%

(scribd.com)

MISSION STATEMENT

Our mission is to deliver a high quality product to our customers which is

affordable and environmental friendly and contribution to the society.

VISION STATEMENT

To be known as innovative in the business world and meeting customer’s

Requirement and delivering high quality products and constantly bringing

new innovative products and capturing maximum market share.

FINANCING

100% Equity (40% invested by Government of Punjab)

0 % Debt.

Punjab Government Support.

OBJECTIVES

Company profit should be 15%.

Market Leadership through CNG bike.

FUTURE PLAN
Increased Volume

Technological Innovations

Merger
PROJECTED DEMAND
Per capita income in Pakistan has increased in the past 5 years at an

average annual rate of approximately 14.0%. The economy is projected

to continue to grow at more than 7.5% in the coming decade. Assuming

an annual decrease in number of persons per new motorcycle purchased

in the next 5 years at 14% (Average decrease for last 4 years being

Motorcycle Industry in Pakistan; Problems & Prospects 16 more than 30%

per annum , demand for new motorcycles in the coming years may be

forecasted as shown in Table below

Table –
Year Total
Annual
Demand
Units
2006-07 890000
2007-08 1050000
2008-09 1250000
2009-10 1500000
2010-11 1780000

(Competitiveness.org.pk)

MARKET SEGMENTATION

We are segmenting our market on following bases

GEOGRAPHICAL SEGMENTATION:
All major cities in Pakistan especially in Punjab.
DEMOGRAPHIC SEGMENTATION:
Middle and lower class

TARGET MARKET:

Our target will be :

Students

Banks

Government institutes

Pharmaceutical Companies.

Restaurants.

Sales Organizations.

Courier Companies.

GOVERNMENT INITIATIVES

Pakistan Government is trying to facilitate the motorbike industry in the

country in a positive way. The overall motorbike industry is getting better in

the country. Keeping this is view Government of Pakistan has got an

extension from World Trade Organization (WTO) earlier this year till 2010

until when Pakistani market wont be opened for foreign assembled bikes. By

that time government plans to increase the productivity of the local industry

so that they can cope up with the foreign made bikes. Right now a tax of

115% is imposed on imported motorbikes, which is to discourage their

import and facilitate the local industry.

(scribd.com)

COMPETITIVE ADVANTAGE

First time CNG bike in Pakistan.

Low development cost.

Low maintenance cost.

Very competitive price

Market needs

The most important wants of peoples are

Low cost bikes with easy mainatiance and easy availaibility of parts with

good after sales services

Market trends
Due to increase in pertrol prices ,the peoples are moving towards cng due to

its low price as compare to petrol and more milage.

MARKET GROWTH
The market situation in the last couple of years in the motorbike industry has

shown very good and positive increase in the shape of overall market size.

There has been positive Growth in the industry. Quite a number of New

Entrants have entered the Pakistani motorbike industry in the last few years

with low prices, which has seen an increase in overall size of the industry.
As far as the Substitutes go like small cars and public transportation they

have had dual impact on the market situation of the industry. Like for some

middle income group people small cars have become affordable due to the

two-part pricing (financing). While on the other hand the reduction of

motorbike prices has seen more and more people buying the motorbikes who

don’t have that much buying power. In regards with the Public

Transportation while there has been an increase in their quality and

number yet they have become expensive and the factor of dependence

and inconvenience is still there. So a buyer says why not take a Rs.

40,000 bike, which is economical, independent and personal.

(Scribd.com)

INDUSTRY ANALYSIS

There is a Extreme Competition in the market

There is also a High Demand of moterbikes

Market Growth is good.

There is Economic Boost in industry.

SWOT ANALYSIS

STRENGTHS

It will be first time that cng bike is going to be introduced in Pakistan.

It hs have Low production cost.

It has Low maintenance cost.

Easy availability of spare parts.

We are offering very competitive price.

It also has Reasonable price of spare parts.

WEAKNESSES

We have Limited Investment.

NO experience

OPPORTUNITIES

Increased markets size, which will increase sales

Growing market for motorcycle –

Estimated bikes 1,500,000 by the end of 2009-2010 compared to 1,250,000

in 2008-2009.

Cost effective CNG bike, attracting industries.

High Petrol Prices

(Competitveness.org.pk)

THREATS
Future threat of Indian bikes after 2010.

Competitors can enter into CNG Segment with high budget.

DISTRIBUTION CHANNALL
Company is focusing on dealer network distribution system.

The dealer ship is given on the basis of expertise and dealer’s financial

Strengths in the field.

TERRITORIES:
Company’s main focus will be on major cities in Punjab and limitedly in

other provinces of Pakistan

COMPETITORS

Our main competitors are as follows:

Honda

Yamhaa

Suzuki

Sohrab

Qingqi

SALES STRATEGY
Our strategy focuses first on maintaining the identity with the high-end

buyer who appreciates the best available quality product, but is also very

demanding regarding production systems and technology. We will work

with Sharper Image and Broadview more than ever. Our work with

distributors has been promising.

Our sales strategy is direct sales strategy

because we are hitting our competitors directly with a little change in

product as we have competitive edge of first time CNG bikes in Pakistan.

SALES FORCAST

IT has been forecasted that their will be sales of 15,00,000 motorcycles in

the current financial year.

Our target sale will be 60000 units in this year.

(competitiveness.pk)

POSITIONING
We are providing CNG motorbikes which are most economical consumption

in motorcycles because no any other company is providing this technology

with their products.

BRAND POSITIONING:
Flying horse.

More for less Positioning Strategy.

Market share
In motorcycle market Honda has a share of approximately 72%. The

company has a installed capacity of hundred thousands motorcycles per

annum. Yamaha motorcycles fall behind with second largest share of

17.2%

Following table shows us the units sold and market share of motercycle

players.

Motorcycle Market share (%)

Honda 72.86
Yamaha 17.14
Suzuki 6.23
Sohrab 0.76
qinjgi 4.01

(scribd.com)

Pricing

COMPETITOR BASED PRICING STRATEGY

REASONS:
Large number of competitors.

Low priced Chinese brands.

PRICING METHOD

We sets market penetration-pricing strategy in order to

Capture the market share.

Attract large number of customers.

PROMOTIONAL STRATEGY
Trade Shows.

Print media

Electric media:

City 42

Geo tv

Management Summary
MANAGEMENT SUMMARY
MANAGEMENT PLAN

CHIEF EXECUTIVE OFFICER

MR. WAQAS DAUD will be the CEO of the company .

CFO

Chief Financial officer will be responsible for all the financial matters of the

organizations, making all kind of financial statements, inflow and out flow

of cash.
Marketing Manager

Marketing manager is responsible for analyzing customer needs,

formulating polices regarding all kinds of advertisement, promotion,

positioning etc.

HUMAN RESOURCE PLAN

Human resource is the key to any organizations success because at the end

of the day it is the people who run the business. Training session will be held

for employees for motivation and enhancing their skills.

Following is the explanation of the job description and job specification of

the key employees.

MARKETING MANAGER

Job Description

We will have a permanent marketing director whose job will be to analyzing

customer needs, formulating polices regarding all kinds of advertisement,

promotion, positioning etc. . He/she will be given a separate office and

fringe benefits. Work timings will be from 9 a.m. to 5 p.m. He/she will be
interacting with all other departments and report directly to the C.E.O.

He/she will be overseeing the marketing staff.

Job Specification

The marketing director should be vocal, innovative (optimistic) in terms of

ideas and preferably young and outgoing. He/she should have good

communication skills and must be good in delivering presentations. The

education level will be M.B.A with the specialization in marketing and

advertisement. He/She should have a great knowledge of marketing the

business (preferably) with the five year experience of marketing.

Job Specification

The finance director should have financial skills and must be an expert of

accounts. The education level will be M.B.A with the specialization in

finance. He/She should have a great knowledge of our business transactions

(preferably) with the two-year experience of finance. The qualification is

given much weight because there is no compromise on that. In Qualification

if the applicant is more qualified than the requirement, they are given

preference.
ADMIN OFFICER

Job Specification

The administration officer should have a minimum qualification of a

bachelor’s degree. He must also have a minimum of two years work

experience. He must have good management skills.

ACCOUNTANT

Job Description

The job of the accountant is to record the day to day transactions and do

book keeping.

Job Specification

The minimum requirement for an accountant is bachelor of commerce from

a recognized institute and a minimum experience of two years as an

accountant.
FINANCIAL PLAN

Total Budget 2606500000

Land and building 310000000
Plant and Machinery 250000000
Marketing & Advertisement 50000000
Production Cost (60500 Units) 1996500000

We have purchased 1-acre land for Rs 160000000.

We have purchased plant and machinery form china for Rs 250000000.

(Our product cost will be approximately Rs 33000 including 24000 per unit

assembling cost and 9000 per unit operating and administrative cost.)

We will give bike to the dealer for Rs 38000 and the final price will be

40000.
Our total assembling cost will be for Rs 1452000000 and total operating cost
will

Be for Rs 544500000.

Advertising cost is Rs 50000000.

Development cost 150000000

The total budget of the company will be for Rs 2606500000.

Projected Profit and Loss

The following table shows the projected profit and loss for Splitter Pvt Ltd.

Pro Forma Profit and Loss

2009 2010 2011
22800000 304000000 190000000
Sales 00 00 0
14400000 192000000 120000000
Cost of sales 00 0 0
84000000 112000000
Gross profit 0 0
700000000
------------ ------------ ------------
Expenses:
54000000
Operating expences 0
720000000 450000000

Advertising and Marketing Exp 50000000 40000000 40000000

Depreciation 20000000 18400000 16928000
Other 0 0 0
------------ ------------ ------------
23000000
Profit Before Interest and Taxes 0
341600000 193072000
(57500000 (48268000
Taxes Incurred )
(85400000)
)
 17250000
Net Profit 0
256200000 144804000

Projected Balance Sheet

The following table represents the financial position of the Splitter Pvt Ltd at
the end of this years.

Current Assets 2009

Cash 1368000000
Accounts Receivable 912000000
22800000
Total current assets 00
Long-term Assets
Land and Building 310000000
2500000
Plant and Machinery 00
Total Assets 2840000000
20
Current Liabilities 09
200000
Accumulated Depriciation 00
Accounts Payable 41000000
Capital 2779000000

Long-term Liabilities 0
Total Liabilities and Capital 2840000000
PRACTICLE EXAMPLE

Cost of 1 lt. Petrol = PKR 61

Cost of 1 Kg CNG = PKR 48

In 1 lt. Petrol = 50 Km

In 1 Kg CNG 80 Km

Paying PKR 13.00 LESS

&
Travelling 35Km MORE
Average:

1 Biker travels 1000Km / Month.

20. lt. on Petrol bike. (Cost PKR 1220.00)

12.5 Kg on CNG bike. ( Cost PKR 465 )

SAVINGS PER RIDER PKR 755.00