THE GENERAL TYRE AND RUBBER COMPANY OF PAKISTAN LIMITED

Driving The Future

INTRODUCTION
The General Tyre and Rubber Company of Pakistan Limited (Gentipak) is Pakistans premier industry. It was established in 1963 by General Tire USA and has been in production since 1964. Gentipak has a Technical Services Agreement (TSA) with CONTINENTAL AG (Germanys largest tyre manufacturer) which enables it to produce tyres of GENERAL brand and provides the latest technology for production of tyres based on Continentals, R&D. The Plant and the Offices, are located in suburb of Karachi. Initial production capacity was only 120,000 tyres per annum but is now around 2,000,000 tyres per annum. Our plant is constantly upgraded and is equipped with the most modern technology in tyre manufacturing.

Vision
To be the leader in tyre technology by building the Companys image through quality improvement, competitive prices, customers satisfaction and meeting social obligations.

Mission

To offer quality products at competitive prices to our customers. To endeavor to be the market leader by enhancing market share, consistently improving efficiency and the quality of our products. To improve performance in all operating areas, so that profitability increases thereby ensuring growth for the company and increasing return to the stakeholders. To create a conductive working environment leading to enhanced productivity, job satisfaction and personal development of our employees. To discharge its obligation to society and environment by contributing to social welfare and adopting environmental friendly practices and processes.

CORPORATE PROFILE.
THE GENERAL TYRE AND RUBBER COMPANY OF PAKISTAN LTD.

Gentipak is a public limited listed company with majority shares held by Bibojee Services Ltd., Pak Kuwait Investment Company (Pvt) Ltd. and National Investment Trust. CONTINENTAL AG (Germanys # 1 tyre manufacturer) is also Companys share holders, providing Gentipak all the technology needed for production under a long term Technical Service Agreement (TSA) as well. It also allows Gentipak to use it's international brand name General. The awareness of the GENERAL brand name is very high. Recently, Gentipak has also launched a new line of passenger car tyres of latest European designs under the brand name EURO. All the radial tyres are tubeless and steel belted and have a full cap ply for safety and durability. Gentipak produces radial tyres for passenger cars and light trucks in rim sizes ranging from 12 to 16. It also produces bias (cross ply) tyres for light trucks, trucks/buses and farm (agricultural) tractors. Gentipak is the major supplier of tyres to the local automotive and tractor assembly plants. It has contracts to supply 15 radial passenger car tyres to Toyota and Honda approved after stringent testing by their principal companies in Japan. Beside above, Gentipak is also supplying tyres to Pak Suzuki Motor Company, Hino Pak, Ghandhara Industries, Ghandhara Nissan, Al-Ghazi Tractors, Millat Tractors and others. Gentipak is also exporting tyres to few neighbouring and Middle East countries. It is currently exploring other markets as well for export. Gentipak employs directly and indirectly approx. 1800 persons all over the country. It has offices in three other cities of Pakistan besides having its Head Offices in Karachi. It is selling its products in the replacement (after) market through a network of more than 100 dealers and has a backup in the shape of sales and technical force covering the entire territory. All tyres produced by Gentipak are marketed after stringent testing and quality assurance and backed up by a comprehensive after sales warranty.

SOME OF OUR CUSTOMERS

ADAM MOTOR COMPANY LTD. D.S.U. 10 Pakistan Steel Industrial Estate, Bin Qasim Karachi, 021 201750781. AL-GHAZI TRACTORS LTD. 11th Floor, NIC Building Abbasi Shaheed Road Karachi, 021 5680822, 5660815.

HINO PAK MOTORS LTD. D-2, S.I.T.E. Manghopir Road Karachi, 75700 021 2563028.

DEWAN FAROOQUE MOTORS LTD. Dewan Centre, 3-A Lalazar Beach Hotel Road Karachi, 74000 111-313-786.

GHANDHARA INDUSTRIES LTD. (N.M.L) (Formerly NATIONAL MOTORS LTD) Hub Chowki, S.I.T.E Karachi, 021 2560090.

GHANDHARA NISSAN LTD. Ghandhara House 109/2 Clifton, P.O.Box No. 3812 Karachi, KARACHI-6 021 5683756.

HONDA ATLAS CARS (PVT) LTD. 43 KM Multan Road Manga Mandi Lahore, 425877711.

INDUS MOTOR COMPANY LTD. NWZ / P-1 Port Qasim Industrial Estate Karachi, 021 4750041-8.

MILLAT TRACTORS LTD. Sheikhpura Road Shahdara Lahore, 427924166.

MASTER MOTOR CORPORATION LTD. S-30, S.I.T.E. Mauripur Road Karachi, 75750 021 2571982.

PAK SUZUKI MOTOR CO.LTD. DSU-13, Pak.Steel Industrial Estate Bin Qasim Karachi, 021 4750788.

NEXUS AUTOMOTIVE (PVT) LTD. 48-D, Block 6 P.E.C.H.S Karachi, 021 4311975-8.

SIND ENGINEERING (PVT.) LTD. 16, Dockyard Road West Wharf, P.O.Box No. 5262 Karachi, 74000 021 2202721-5.

SIGMA MOTORS. HEAD OFFICE 28,KHAGHAN ROAD 1-B,Street 55,F-8/4 Islamabad, 051 2262803.

EVIDENCE:

General Tyres to start manufacturing bike tyres

By Farhan Zaheer Published: March 16, 2012

KARACHI: General Tyres, the leading tyre manufacturer of Pakistan, is investing Rs500 million in expanding its production facility and has started manufacturing tyres for CNG rickshaws. It also plans to bring motorcycle tyres into the market by the end of the fiscal year in June.

Despite unfavourable business conditions, General Tyres has been gradually investing in its manufacturing facilities, Chief Executive Mohammad Shahid Hussain said while talking to The Express Tribune on the sidelines of a press conference on Thursday. Today, business conditions are better and are improving with every passing month. Speaking to the media, Hussain said the company wanted to capitalise on the fast growing market of compressed natural gas (CNG) rickshaws and motorcycles in the country. This year, Pakistan is expected to produce 1.8 million units of motorcycles while 140,000 CNG rickshaws are already on roads. Fortunately, there is no smuggling problem in the motorcycle tyre category, he pointed out. Replying to a question on opening of trade with India, Hussain said Pakistan should raise the issue of non-tariff barriers with the Indian government, which create hurdles in the way of exports. On the other hand, our market is open for Indian exporters owing to relatively less intrusive laws and restrictions. Hussain pointed to the problem of under-invoicing and smuggling of tyres, which have severely hit the domestic manufacturers. Though the government has tightened up on smuggling and under-invoicing, still there is much room for improvement, he said, adding billions of rupees could be saved by improving the customs clearance system. If the cost of a Chinese tyre was around $240-$245, some traders were importing the same by declaring a value of $130-$140, causing severe losses to the national exchequer. And, then they gave all taxes on this lower import price, he said. Pakistan imports some 60% of tyres from China. Tax evasion actually helps tyre importers to sell these at low prices, making it almost impossible for us to compete with them, Hussain added. He, however, believed that Pakistan had the potential to be a big tyre exporter, provided the government created a level playing field for the manufacturers and controlled under-invoicing and smuggling. General Tyres manufactures tyres for cars, light trucks and tractors. Some 60% of its tyres are sold to the original equipment manufacturers (OEMs) carmakers in the country. The company also exports its products to Afghanistan, Yemen and Syria and is exploring new export markets. Published in The Express Tribune, March 16th, 2012.

STATEMENT: General Tyre and Rubber Company (GTR) will invest approximately
Rs500 million this year in new motorcycle tyre production and balancing modernization and renovation (BMR).

EVIDENCE:

General Tyre to invest Rs500m

From the Newspaper | DAWN.COM | 7th March, 2012 0

GTR Chief Executive Shahid Hussain told Dawn that the investment this year would be double than last year. The company will manufacture two- wheeler tyres due to its huge market, with 16-17 per cent growth in bike production every year. He added that trial production of two wheeler tyres will commence in the last quarter of 2012. He, however, said that the companys overall production of various kinds of tyres may see a slight growth to 1.6 million tyres by the end of current fiscal year as compared to 1.50 million tyres produced in 2010-2011. The company has the capacity to produce 2.25 million tyres per annum. He said that a sharp drop in tractor production made an adverse impact on tractor tyre production target otherwise companys overall production of tyres should have reached 1.7-1.8 million tyres in the current fiscal year. He added that the company maintained direct and indirect employment of 1,800 despite tractor industry crisis. Now farm machinery making industry is on a recovery path after cut in GST rate to five from 16 per cent. The company, he said, exported tyres worth Rs105 million in the last seven months of the current fiscal year to Syria, Afghanistan and Yemen mainly. The companys total tyres exports stood at Rs126.5 million during 20102011 to the same countries. Efforts are underway to capture new global markets and talks are underway with buyers of many countries for cars, light trucks and tractors tyres, he added. The company has also introduced a new tyre, named Chief for CNG rickshaws after successful road tests. This new tyre saves up to 20 per cent of gas as against currently competing tyres due to its special customised design and rolling resistance, he said, adding that despite CNG crisis, the CNG rickshaw production will carry on.Pak-Suzuki Motor Company had also discontinued booking of Mehran, Alto and Bolan (CNG variants) from middle of February and the company used to produce 80 per cent CNG fitted vehicles in total production.Shahid did not see any negative impact on tyre industry and said tyres supply orders from Pak Suzuki had been going at normal pace.

RESEARCH ISSUE
The research study aims to analyze and evaluate the investment in producing tyres for Motorcycles by General Tyre Ltd.

HYPOTHESIS:
The investment in Motorcycle tyres by General Tyre would increase their market growth/share.

HYPOTHESIS
NON- DIRECTIONAL HYPOTHESIS:
1. Market growth may be influenced by exploiting opportunity of Motorcycle tyres. 2. Market share in International market will change after exploitation of Motorcycle tyre opportunity. 3. Exploitation of Motorcycle tyre opportunity can make a difference in profitability of overall organizations.

DIRECTIONAL HYPOTHESIS:
1. Increase in investment results increase in market growth. 2. Market share would expand by exploiting the opportunity of Motorcycle tyres. 3. The company would be able to export through expansion in production with Motorcycle tyres.

PROBLEM STATEMENT:
The purpose of this research is to highlight the consumer perception regarding motor cycle tyres. An effort has also been made to seek and understand the buying behavior of motor cycle tyre users with how much duration they think a tyre will take to complete its life.

RESEARCH OBJECTIVE:
1. To determine the trends prevailing in the Motor Cycle Tyres Industry. 2. To understand the perception and buying behavior of Motor Cycle Owners 3. To get an insight about the expectations motor cycle owners associate with the attributes in a tyre and what they consider to be the duration of the usage of a tyre. 4. To provide feasible recommendations and guidelines for the Motor Cycle tyres launch.

RESEARCH DESIGN (METHODOLOGY):

PURPOSE OF THE STUDY
The purpose of this research is to highlight the market trends of Motor Cycle Tyres. Descriptive on ground surveys will be conducted in which the questions are asked from Motor Cycle owners to understand their perception and get their insight and to determine their buying behavior of tyres.

DATA COLLECTION METHOD

Data will be collected through personally administered questionnaires containing both open ended and fixed alternative questions. These questionnaires will be filled from representative sample chosen from the population to conduct research. Its greatest advantage is that it is less expensive and consumes less time then interviewing.

SAMPLE DESIGN
Sample size of 500 will be taken. The sampling method that will be used for our research is nonprobability due to the lack of a proper sampling frame. Convenience Sampling is one of the non-probability methods that will be used in order to choose the Motor cycle owner and riders/drivers who are conveniently available.

SCOPE OF STUDY
The survey will be conducted in all the major parts of the city including Gulshan-e- Iqbal, Gulistan-e-Johar, Defence, Nazimabad, North Nazimabad and other parts to get a proper view of the preferences of people.

QUESTIONNAIRE DESIGNING
The questionnaire is designed keeping in view the research questions. For subjective information, questions are close ended. For fixed, alternative questions are used, whereas for objective facts, simple direct questions will be asked so that people may not get confused by the amount of questions. The language used is very simple and easy to understand.

PRESENTATION:
Results Extracted From Questionnaire
For Research on Motorcycle Tyres

1. Motor Cycle Maker? Motorcycle Maker

26%

33% Honda Unique

16% 25%

Super Power Other

Predominantly, the bikes surveyed were overwhelmingly of the Honda make as can be seen from the above chart. Whereas Chinese made Super Power and Unique were the second and third most popular respectively. The share of the remaining companies is negligible compared to the three above.

2. Motor Cycle Type?

Motorcycle Type
6% 15% 48% 70 cc 125 cc 31% 150 cc More than 150 cc

As far as the Motor Cycle Type is concerned, for every 100 bikes surveyed, mostly were 70cc.

3. Average daily running (kms)?

Average Daily Running ( in Kms)

8% 12% 20%

20 kms or less 30 kms 40 kms More than 40 kms 60%

The average daily running of motor cycles varies differently with people who do private jobs have their respected offices at different localities where they have to travel by motor cycle and so the average running is different as people travel a mix proportion between 20km or less, 30km to 40km and more than 40kms daily.

4. From how many years you are using Motorbike?

Using Bike ( in years )

8% 31% 23% 1 year 2 years 3 years 38% more than 3 years

Majority of the people are using the motorbikes from 3 years or more. A high percentage of those are associated with the middle class families.

5. You change the tyres?

Change the Tyres

22% 45% When it loses its grip When it looks too old 33% Other

The main features and attributes according to the perception of people are mainly grip which almost half of the people expects the main feature while purchasing a motor cycle tyre. Therefore mostly people change the tyres when it loses its grip.

6. You prefer to buy used tyres or new tyres?

Buy tyres
20%

New Used 80%

People believe in purchasing new tyres.

7. The life expectancy of current tyres is?

Life Expectancy
10% 25%

20%

1 year 2 years 3 years

45%

More than 3 years

The average life of motor cycle tyres according to the customers perception is three years of both front and rare tyres with people having a less accurate idea about the actual life expectancy of it. It was observed that people had a very less information about tyres.

8. The features/benefits that you will look for in a tyre are?

Features
11% 32% 42% 15% Look Stylish Durable Economical Other

As stated earlier that the main features and attributes according to the perception of people are mainly grip and durability which almost half of the people expects the main feature while purchasing a motor cycle tyre while more than 30% of the customers believes in having effective price(economical) and best quality as the main attribute while purchasing a motor cycle tyre. A very few of the people believe in style, fuel consumption and warranty claim as the main feature in a motor cycle tyre.

9. The tyre brand currently fitted is?

Current Tyres
15% 21% 26% Service Panther Diamond 38% Other

The survey showed that Panther has captured the industry of mounted tyres. More than 35% of the people have panther tyres fitted in their bikes.

10. Rate your current tyre brand?

( Very poor =01, Poor=02, Average=03, Good=04, Excellent=05 )

Rate your current brand

15% 9% 18% 1 23% 2 3 4 35% 5

11. The most preferred brand is?

Most preferred brand

22% 22%

Service Panther 22% 34% Diamond Other

Panther is the most preferred brand when it comes to motorcycle tyres where as people also like Service, Diamond etc.

12. Can you recall any Ad pertaining to Motor Cycle tyres?

Motor cycle Tyre Ad

23% 9%

Yes No Don't Know 68%

The question regarding the ad pertaining Motor cycle tyre did not had a much positive response as more then 65% percent of people had not seen any advertisement regarding motor cycle while those who have seen recognized advertisements of Servis tyres and a very few of Diamond tyres.

FINDINGS AND ANALYSIS

There are a large number of motor cycles running in Karachi with many companies having different models of their brands. As per the analysis it was observed that a large number of people use Honda motor cycles where as others use different China made motor cycles of Unique, Super Star, Super Power, Speed, Habib and other new models. During the course of our analysis we mostly came across 70cc motor cycles, the figures are given earlier in the form of pie charts. It was also observed that a large proportion of sample size had Panther tyres and also the people that changed the tyres recommended Panther as their choice. The figures are in the charts given above. The reason with which people mostly changed the tyres was found to be depending on the number of km they traveled. It was observed that most of the people did not know about the air pressures which they had in their bikes. Most of the people felt that the average expectancy life of a tyre should be three years or more. The overall findings showed that most of the people are attracted towards the recommendation of the dealers regarding the selection of tyres.

CONCLUSION
To sum up the research and our findings,the market for motor cycles is one which is not only thriving but thriving rather quickly.There seems to be a huge room for General Tyres to exploit as the perception of people generally is positive as far as an established brand like General Tyre is concerned.The crux of our findings is that first,it is mostly the price concious group that needs to be catered for,and naturally,for such a price concious group,it is value for money that matters along with a good grip and so a reasonable price and a strong grip are the primary attributes in any such line of tyres launched.Secondly,when asked the factor that lead to people buying the tyre that they did was the dealers recommendation and so emphasis on dealership is of utmost importance.If these two factors are looked after,then this potential launch should God Willing be a fruitful one.

RECOMMENDATIONS
For a brand like General Tyre which is entering in a new market it is important to inculcate its existence in the minds of the potential consumers. And in todays world, its more important than ever to use the marketing and advertisement tool for this very purpose.Television advertisment is one of the key things as the audience covered is very wide and such promotion leaves a lasting impression on the mind of the consumer. A cheap yet effective method for this can advertising on cable networks. Another effective method for promotion could be the distribution of souvenoirs such as jackets with general motor cycle tyres logo printed on them which will increase the brand value and will also not be as expensive as other methods.