PEL Power Generator Division

Nazir Ahmad/ Mian Zafar

PEL Generator

IntroductionPEL Aircon power Generator is new idea

by focusing the power crisis currently Pakistan facing. PEL has following goals by lunching domestic / Semi commercial type generator’s.

Getting at least 10 % Market share.Improved and efficient service.Quality product.Building Strong Brand Image.

Competitive AnalysisThere are so many brands available in the

market with different prices, quality and features. Some of the main brands available in the market are as under:-

Honda.Enpower.Kipor.Jiang Dong.Swan.Generic.

Competitive Analysis, Cont.Honda is one the main competitor for the

PEL. Honda selling strategy is 3’s dealership. 3’s means sales, services and spare parts under one roof.

StrengthsQuality Product.Efficient & Timely services.High demand of the Product.Awareness in the market about the product.

Competitive Analysis, Cont.

WeaknessThere are some weakness in the Honda

which are as under: -

1. Shortage of stock.2. High Price product.3. Petrol Option only.

Growth in the Generator’sGenerator sales are increasing due to the

following factors.Shortage of electricity ( No near future

plans for hydle Power)Increase in the sales of Appliances

(Refrigerator, split air conditioners, washing machines, etc.. )

Increase in number of housing societies.Demand increase due to opening of new

bank branches, store’s, Multinational retail / Wholesale chains, etc..

PEL StrategyBy focusing the Honda dealer’s network,

PEL strategies is to appoint the 3’s dealer’s network. The main idea behind for appointing the 3’s dealer is selling quality product ,more efficient and timely services under one roof. This will increase the brand loyalty and brand image of the company in the mind of the target customer’s.

Criteria to appointing 3’s Dealer’s

PEL set the following criteria to appoint the 3’s dealer’s network.

1. History of the dealer.2. Potential of the dealers and areas.3. Capacity of having minimum stock level.4. Ability to meet the companies target.5. Capable of handling at least 2’s dealership.

1. Sales.2. Service.

Target Area’sPEL sales strategy for domestic type

generator is based on provincial basis.1. Punjab2. NWFP3. Sind/ Balouchistan4. Northern Area

Target Area’s. Cont,..

Punjab NWFP

Northern Areas

Sind / Balouchistan

Target Areas Target AreasBahawalpur Sialkot

Daska Sialkot FaisalabadGujarat Gujranwala

Sadiqabad SargodhaVihari Sheikhupura

Chakwal JampurRajanPur Jhang

Jhelum MultanRawalpindi Sahiwal

Target Areas Target AreasD.I.Khan D.G.KhanPeshawar

Target Areas Target AreasSukkur KarachiJacobad Khairpur

MirpurKhas NawabshahQuetta Dadu

Target Areas Target AreasGilgit Azad Kashmir

Market Size of the GeneratorsMarket size of the generator’s is further

categorized as under:-

Area wise market Size.Capacity wise market Size.

Cont,..

Market Size of the Generators Cont,

Area Wise market Size are as under:-

Market size is only domestic and semi commercial types generator’s, excluding telecom industry.

Source:- Brandreth Road Dealers / Honda Dealer’s

Area PotentialLahore 10,000 Faisalabad 800 Sialkot 800 Gujranwala 800 Karachi 15,000 Multan 700 Bahawalpur 700 Sahiwal 200 Sargodha 200 Rawalpindi 2,500 Jhelum 400

Total 32,100

Areawise Potential for the year 2007-08

15,000

700

200700

2002,500 400

800800

800

10,000

Lahore Faisalabad Sialkot Gujranwala

Karachi Multan Bahawalpur Sahiwal Sargodha Rawalpindi Jhelum

Market Size of the Generators Cont,

Capacity wise market size of the generators are as under:-

Note:- Excluding telecom Industry generator’sSource:- Brandreth Road Dealer’s / Honda Dealer’s

2.0 KVA 3.0 KVA 5.0 KVA 8.0 KVA 10.0 KVA 15.0 KVA 20.0 KVALahore 10,000 3,000 2,000 1,500 500 1,000 1,200 800 Faisalabad 800 240 160 120 40 80 96 64 Sialkot 800 240 160 120 40 80 96 64 Gujranwala 800 240 160 120 40 80 96 64 Karachi 15,000 4,500 3,000 2,250 750 1,500 1,800 1,200 Multan 700 210 140 105 35 70 84 56 Bahawalpur 700 210 140 105 35 70 84 56 Sahiwal 200 60 40 30 10 20 24 16 Sargodha 200 60 40 30 10 20 24 16 Rawalpindi 2,500 750 500 375 125 250 300 200 Jhelum 400 100 100 60 40 40 30 30

32,100 9,610 6,440 4,815 1,625 3,210 3,834 2,566

Capacity Qty.PotentialArea

Import Different type of Generator

Import of generator from March ~ June 07

Source:- PARAL Data System

PRODUCT TOTAL0.5~2 KVA 16,677 2.1~5 KVA 7,149 5.1~10 KVA 3,291 11~30 KVA 580 31~50 KVA 189 51~100 KVA 326

101~500 KVA 733 Above 500 KVA 75

Total 29,021

Import of Generators from March ~ June 07

0.5~2 KVA57%

Above 500 KVA0%

101~500 KVA3%11~30 KVA

2%

51~100 KVA1%

31~50 KVA1%

5.1~10 KVA11%

2.1~5 KVA25%

0.5~2 KVA 2.1~5 KVA 5.1~10 KVA 11~30 KVA31~50 KVA 51~100 KVA 101~500 KVA Above 500 KVA

Price comparison of the generator’s

Generator prices are varied based on the following factor’s which are as under:-

1. Quality of the generators.2. Warranty.3. Availability / Demand of the generator's.

Price comparison of the generator’s. Cont,.

Price comparison the generator with warranty is as under:-

Capacity 2.0 KVA 3.0 KVA 5.0 Kva 8.0 KVA 10.0 KVA 15.0 KVA 20.0 KVA 24.0 KVABrand Jiang Dong Jiang Dong Jiang Dong Jiang Dong Jiang Dong - - Jiang DongPrice 24,000 30,000 46,000 55,000 125,000 - - 180,000Type Petrol Petrol Petrol Petrol Diesel - - Diesel

Brand Honda China Honda China Honda ChinaPrice 24,000 35,000 50,000 Type Petrol Petrol Petrol

Brand Honda Original Honda Original Honda Original Price 32,000 50,000 80,000 Type Petrol Petrol Petrol

Brand Swan Swan Swan Swan Swan Swan Swan SwanPrice - - 54,000 - - 160,000 - 175,000 Type - - Diesel - - Diesel - -

Brand - - Kipor Kipor Kipor Kipor Kipor KiporPrice - - 55,000 165,000 260,000 - - Type - - Diesel Diesel Diesel - -

Brand Jiang Dong - Jiang DongPrice 125,000 - 180,000 Type Diesel - Diesel

Brand Honda Original - - - - - Price 125,000 - - - - - Type Gas Generator - - - - -

Price comparison of the generator’s. Cont,.

Price comparison without warranty of the generator’s is as under:-

Capacity 2.0 KVA 3.0 KVA 5.0 Kva 8.0 KVA 10.0 KVA 15.0 KVA 20.0 KVA 24.0 KVABrand Jiang Dong Jiang Dong Jiang Dong Jiang Dong Jiang Dong - - Jiang DongPrice 15,000 19,000 35,000 40,000 90,000 - - 180,000Type Petrol Petrol Petrol Petrol Diesel - - Diesel

Brand Honda China Honda China Honda ChinaPrice 15,000 17,500 32,000 Type Petrol Petrol Petrol

Brand Honda Original Honda Original Honda Original Price 32,000 50,000 80,000 Type Petrol Petrol Petrol

Brand Swan Swan Swan Swan Swan Swan Swan SwanPrice - - 42,000 - - 125,000 - 175,000 Type - - Diesel - - Diesel - -

Brand - - Kipor Kipor Kipor Kipor Kipor KiporPrice - - 45,000 145,000 230,000 - - Type - - Diesel Diesel Diesel - -

Brand Jiang Dong - Jiang DongPrice 90,000 - 180,000 Type Diesel - Diesel

Brand Honda Original - - - - - Price 125,000 - - - - - Type Gas Generator - - - - -

PEL proposed Sales Plan for the year 2007-08

PEL sales plan for the year 2007-08 is as under: -

10 % market share of the total market.

Area Qty.Lahore 750

Rawalpindi 200Peshawer 100

Jhelum 150Fasialabad 150

Jhang 60Karachi 1000

Hyderabad 100Multan 125Sahiwal 110Sailkot 130

Sargodha 125Total 3000

Area wise sales plan for the Year 2007-08

Lahore25%

Karachi34%

Rawalpindi7%

Peshawer3%

Fasialabad5%

Jhelum5%

Sargodha4%

Sailkot4%

Sahiwal4%Multan

4%Hyderabad3%

Jhang2%

Lahore Rawalpindi Peshawer JhelumFasialabad Jhang Karachi HyderabadMultan Sahiwal Sailkot Sargodha

PEL Capacity wise sales plan for Calendar year

PEL capacity wise sales for the year 2007-08 is as under:-

10 % market share for the calendar year.

Capacity Qty.2.5 KVA 9003.0 KVA 10005.0 KVA 900

10.0 KVA 11015.0 KVA 2020.0 KVA 70

Total 3000

Capacitywise Sales Plan for Calendar Year.

2.5 KVA30%

3.0 KVA33%

5.0 KVA30%

10.0 KVA4%

15.0 KVA1% 20.0 KVA

2%

2.5 KVA 3.0 KVA 5.0 KVA 10.0 KVA 15.0 KVA 20.0 KVA

PEL Generator Business Plan 2007-08

2 KVA 3 KVA 5 KVA (P) 5 KVA (D) 10 KVA 12 KVA 15 KVA

C & F 100.00 150.00 300.00 392.00 1,000.00 1,500.00 1,600.00 TT 97.00 215.00 150.00 218.00 650.00 950.00 940.00 Total per unit - US $ 197.00 365.00 450.00 610.00 1,650.00 2,450.00 2,540.00

C&F - Pak Rs. 6,150 9,225 18,450 24,108 61,500 92,250 98,400 CD @ - - 3,764 4,919 12,547 18,821 20,076 Sales tax @ 923 1,384 - - - - - TT 5,966 13,223 9,225 13,407 39,975 58,425 57,810 Others 246 369 738 964 2,460 3,690 3,936 Excise duty 62 92 185 241 615 923 984 Income tax @ 354 530 1,111 1,451 3,702 5,554 5,924

Landed cost 12,777 23,439 33,472 45,090 120,800 179,662 187,129 Installation charges 1,500 1,500 1,500 1,500 2,500 3,000 3,000

14,277 24,939 34,972 46,590 123,300 182,662 190,129

Assessable value 17,500 28,000 42,000 56,000 150,000 205,000 220,000 Incentive - - - - - - - NSV 17,500 28,000 42,000 56,000 150,000 205,000 220,000 Sales tax 2,625 4,200 - - - - - Cost to Dealer 20,125 32,200 42,000 56,000 150,000 205,000 220,000

Gross Margin - Rs. 3,223 3,061 7,028 9,410 26,700 22,338 29,871 Gross Margin - % 18.42 10.93 16.73 16.80 17.80 10.90 13.58

Freight - Rs. 350 350 400 500 1,500 1,500 1,500 Contribution Margin - Rs./ unit 2,873 2,711 6,628 8,910 25,200 20,838 28,371 Contribution Margin - % 16.42 9.68 15.78 15.91 16.80 10.16 12.90

Quantity 900 1,000 100 800 110 20 70 3,000

Contribution margin - Rs. 2,586 2,711 663 7,128 2,772 417 1,986 18,262

Exchange rate 61.50

Following are point to be emphasize while importing the above capacity.

Sales will subject to quality / after sales and timely availability of stocks.

Price should be comparable to other equlant brand available in the market.

PEL Capacity wise sales plan for the year 2007-08. Cont,.

PEL genset Distribution Strategy We will sell the genset on conventional market only

through our distributors or 3’s dealers. We will not announce this network to our appliances

dealers. We will sell genset to appliances dealers through our

distributors monthly schemes. The annual sales target achievement and

development of distribution network will be the responsibility of Generator Division.

The Unit sold on appliances network will be considered the sales of genset business annual sales targets.

Thank You

Survey at Brandreth Road Dealer’s.Honda Dealer’s.Multiline Engineering company.PARAL Data system .

Source of Data Collection