PROJECT

SPARTS

MAY 7, 2022
NAME: RAYAN AMEEN (60282) CID: 109690
Submitted to: Sir Faisal Kazi
 SPARTS
Making it Accessible for you.

Executive Summary:

Pakistan is one of the biggest importers of Japanese Automobiles in the world. An average of
approximately 25%-30% cars are running on the Pakistani roads which are from Japanese origin.
Japanese cars are very much liked, accepted, and bought by the Pakistani nation because of higher
security standard, multiple options, and a bit less costly than the locally assembled cars. People from
all over Pakistan either import the desired car on their own while having the import license or import
via 3rd party custom and clearance agent who has the license and are doing business for showroom
owners, themselves, and for dealers. Pakistani nation is much crazy about the Japanese cars that
they tend to promptly import the newly launched car in the Japanese market. For instance, Toyota
LC 300 2022, which is the latest model, Pakistan has three of them recently freshly imported from
Japan. A part from the complete car, spare parts of the cars are in high demand than ever before
from the local market and on-demand from car importers. With the demand comes the supply is
met through imported scrapped cars and smuggled through Afghanistan. The socioeconomic
condition is worsening in Pakistan by every passing day. What people are to the robbers, people
cars’ essential body parts are not even safe particularly in Pakistan. If somewhat people their lose
cars’ parts in any accident or robbery incident, they have to look for that specific part in the local
market and/or car importers. The local spare parts retailers and car importers not only charge the
cost of spare parts above market rates but also charge own money over the spare parts. They
specifically are looting the people and disrupting the market. If you ever tend to visit the spare parts
market you will experience different costs for the same product by the next shop. Difference is the
case for everyone, neither there are properly established Imported spare parts retailers nor
everybody has time to rush through the market and search the required spare part for car along the
way. This market is full of smugglers, looters, and own money earning lusty people. Even the robbers
who rob the cars’ spare parts they end up in reselling the parts to the local market at heavy margin.
My project is going to disrupt the spare parts market. This will be also worrisome for on-demand
importers. I will create a chain of network, in which I will have bulk of local retailers. I will list their
product on my site on around below market rate. Later on, I will conduct a bit research while after
that I will do paid marketing on social media and search engine marketing on multiple sites. I am
going to set the target market of entire Pakistan but for the assessment purpose I will first
experiment Karachi upon the result analytics I will set my business model and strategies. As far as
the imported parts are concerned, I will first research a bit on the most imported cars in Pakistan
and then I will their spare body parts on my website while after getting the quote from the imported
sites and product’s demand from the people. As I have my own agency, car agents, spare parts’
vending sites. I would have no problem at all.

1
Content

1 Associated Benefits…………………………………………………………………………………………………………………………2

2 Spare parts providers………………………………………………………………………………………………………………………3

3 Pakistan’s automobile industry……………………………………………………………………………………………………….3

4 Cars’ spare parts market…………………………………………………………………………………………………………………3

5 Types of auto parts………………………………………………………………………………………………………………………3-5

6 Business Plan (PEST)…………………………………………………………………………………………………………………….5-6

7 Customers and Competitors Analysis……………………………………………………………………………………………..6

8 Porter’s five forces………………………………………………………………………………………………………………………6-7

9 SWOT……………………………………………………………………………………………………………………………………………..7

10 Marketing Plan (4P’s)……………………………………………………………………………………………………………………8

11 Segmentation, Targeting, and Positioning………………………………………………………………………………….8-9

12 Strategies………………………………………………………………………………………………………………………………………9

13 Overall Budget………………………………………………………………………………………………………………………………9

2
Associated Benefits:

I will act as a bridge maker between the people car and the desired spare parts. Before that
traditionally people always remain confused and clueless about the product cost, accessibility,
availability, and compatibility. My business will find them an exact match for their desired product.
Its accessibility, availability and rest assured.

Spare parts providers:

There are two direct suppliers of cars’ spare parts which includes TAU.com and Hanamaru. Both the
vendors supplies the automobiles’ spare parts around the globe. But first the client has to be
registered as a member by depositing a few thousand dollars in the site’s official account and by
then the client can buy any spare part. Both of the suppliers have a large varieties of product
offerings. Ranging from a load of Japanese cars.

Pakistan’s Automobile Industry:

The automotive industry in Pakistan is one of the fastest-growing industries in the country, growing
by 171% between just 2014 and 2018. It accounts for 3% of Pakistan's GDP and employs a workforce
of over 3.5 million people as of 2018. Pakistan is the 35th largest producer of automotive. Its
contribution to the national exchequer is nearly ₨50 billion (US$310 million). Pakistan's auto market
is among the smallest, but fastest-growing in Asia. Around 33% of cars running on the Pakistani
roads are belonged to Japanese imported origin. There is no proper infrastructure in Pakistan
currently to manufacture these imported Japanese cars. Due to this fact, the Japanese car owners
face a lot of problems.

Car’s spare parts market:

The spare parts market in Pakistan and the industry is growing rapidly due to the increase in the
imports of Japanese cars and the smuggling of spare parts via Afghanistan and Iran route transit.
Therefore there are markets set up in overall Pakistan which includes: Shersha, Plaza, Bilal Gunj,
Chaman, and many others. These market is house to many retailers which deals in the spare parts
products. There are also potential players available in the industry who perform the spare parts
business. They import the products on customer’s demand. Based upon the customer’s need of the
spare parts for the particular vehicle.

Types of Auto Parts

There are the following types of auto parts.

3
Genuine Auto Parts

Genuine Auto Parts are also known as Original Equipment Parts (OE). These are the auto parts that a
company manufactures to fit in the new transport item. They are genuine and give good output.
People can get these parts from the company or the company's franchise to which your car belongs.

These parts are more reliable than the other local auto parts. They enhance the life and flexibility of
cars and transport items. Genuine Auto Parts are expensive, and everyone cannot afford to buy
them.

Replacement Auto Parts

Replacement Auto parts are also known as original equipment manufacturing (OEM). The companies
that manufacture these parts also supply them to the manufacturer company. These auto parts are
original parts of the machinery except that they are not packed in the company's packing.

Replacement auto parts are cheaper than the original auto parts. People can easily purchase these
parts from the local spare parts dealer. Replacement auto parts are of good quality and work in good
condition.

Aftermarket Auto Parts

The Aftermarket companies manufacture these auto parts. Aftermarket companies buy the design of
the auto parts from the manufacturer company. These auto parts are of good quality. Sometimes
these auto parts are better than the original auto parts because they have competition in the
market. To meet the competition, aftermarket companies overcome the errors in the original auto
parts. By removing the errors in working and design, these auto parts become more effective than
the original auto parts.

There are hundreds of companies in the Pakistani market that manufacture aftermarket auto parts.
The customer has the facility to select the auto part of his own choice. These auto parts are cheaper
than original and replacement auto parts.

Remanufactured auto Parts

These are the auto parts that a company remanufactures. In these parts, if any one of the items is
damaged, the company replaces that, making the entire auto part functional. For example, if any
part of the engine fails to work or is damaged, the entire engine will be opened. The damaged part is
replaced with the original part. After that, the engine starts working like a new one.

The remanufactured Auto Parts are useful when someone has an old car. Instead of putting new
auto parts in their place, remanufactured auto parts that have a warranty work well. These auto
parts working are the same as the original auto parts. Remanufactured auto parts help to reestablish
the old cars in a new way with good working.

4
Reconditioned Auto Parts

Reconditioned Auto Parts are commonly known as second-hand auto parts. These parts are already
used in auto vehicles. They can be used again after reconditioning. The reconditioned auto parts are
cheaper and easily available in the market. These auto parts do not have any warranty of their
working as they are used auto parts.

Business Plan:

PEST:

Political:

 The government has very harsh policies related to imports and charges heavy duties and
taxes on the imported products.

5
Economical:

 The heavy and continuously increasing exchange rates causes increase in product and
services prices which in turn led to increase of cost of doing business and inflation.
 The current exchange rates stand at 1USD = 186.1PKR and the inflation rate is 12.2%.

Social:

 The spare parts products are socially demanded in the country meanwhile looking at the
people’s driving, road infrastructure and law and order situation.
 People are more prone towards the need and availability of the spare parts products
especially in Karachi where the spare parts products are in high demand.

Technological:

 Innovation and technology has led to the development of local manufacturing of spare
parts production facility.
 There is a huge potential in the development of procuring the Japanese spare parts
production facility.

Customer Analysis:

 There is a vast majority of the people who own Japanese cars. These people cars’ parts are
somewhat damaged, stolen, and rotten. This is the reason that the need and demand of
the Japanese cars’ parts are ever high.
 As there is no proper facility available at all to the people for buying their desired car
products. To face this people have to buy it from local market and suppliers which cost
them in paying high marginal price tag with own money.

Competitors Analysis:

 There are a loads of competitors in the market some are based in mass market section and
some are based in retail market section. The mass market competitors arrange the products
from smuggling, car scrapping, and stealing from car.
 Whereas the retail market competitors arrange the products from importing them through
Dubai and Japan. The mass market competitors charges above average costs. Although the
retail market competitors eventually doesn’t charge high but the imposed economic factors
makes them expensive.

6
Porter’s five forces:

1. Bargaining power of suppliers:

There is a moderate to high bargaining power of suppliers as it varies from region to region i.e Dubai
to Japan. These suppliers either outsource spare parts directly from the forwarding agencies or
scrapyards.

2. Bargaining power of customers:

Customers are very price-conscious now a days they look for the least affordable prices in exchange
for the quality-bound parts. They can shift from market to retailers if they could not find their
desired products.

3. Threat of new entrants:

There is currently no threat of new entrants available as the local manufacturers have no capacity
and capability to produce the imported car’s spare parts. But there could arise a threat of new
entrants if the local producers acquire the patent and production license and start local production
of imported cars’ spare parts.

4. Threat of substitute product:

There could be no possible and contingent threat of substitute product ever in this industry.

5. Rivalry among existing competitors:

There is a high rivalry among existing competitors as the more product portfolio one has the more
competitive edge the competitors have on others.

SWOT Analysis:

Strengths:

 Have own client account, enterprise set up, and clearing and forwarding facility.
 Vast supplier network and parts’ portfolio.

Weaknesses:

 High cost of doing business, inflation and fluctuating exchange rates.

7
  Continual and gradual increase in the cost of business processes.

Opportunities:

 Can cover mass market by also supplying parts to the mass market and local retailers’
market.
 Local production can be done if proper focus can be drawn of the concerned authorities.

Threats:

 Worsen geopolitical condition can trigger disruption in the supply chain of the business
process.
 Some big local manufacturers can score if they tend to tap this opportunity and locally
produce these parts.

Marketing Plan:

4P’s:

Product:

 The spare parts will be imported upon the specific demand from the customers and upon
the pre-booking. Whereas the spare parts will also be arranged from the local markets in the
locality.

Price:

 The product’s pricing will be based upon the price tag set by the international vendors.
Whereas no own money above than average will be imposed upon it.

Place:

 The business set up will be placed in Saddar Karachi which is the center place of Karachi. All
the delivery will be made directly from this operational location.

Promotion:

 The business will be advertised via social media marketing. The e-commerce website will be
put into place where all the parts will be listed. The SEO and SEM strategy will be used.

Segmentation, Targeting, and Positioning:

Segmentation:

8
  Age: 22-48
 Gender: Male and Female
 Status: Lower-upper, Middle, and Upper Class.

Targeting:

 Showroom owners.
 Car importers.
 Japanese car owners.

Positioning:

 Product availability
 Product accessibility
 Product genuinity

Strategies:

Product Strategy:

 The spare part products will be uploaded on the e-commerce dynamic website, products will
be synced with the vendors’ site, and the products offering will be based upon need and
demand. The product will be virtually available on the hosting site.

Pricing Strategy:

The products’ price offering will be based in USD$. The products’ prices will be exclusive of the
overhead charges. The customers would have to pay 25% down payment in order to place and
confirm the order. The 75% of the remaining payment and the overhead charges will be paid by the
customers upon the arrival of the product.

Promotion Strategy:

The social media pages will be developed for the promotion of that particular business inclusive of
Facebook, Instagram, and Youtube. Organic and Paid advertising will be harnessed for generating
business leads.

Distribution Strategy:

There will be no distribution clause for this sort of business. Because I don’t want to increase the
product cost and want to shift this relief to the end consumer. The spare part products will be
directly delivered to customers by our private transport and courier service providers.

9
Overall Budget:

The initial capital required to kick start this business is approximately Rs 2.5M. The factors involves
website creation, app creation, territorial warehouses, loading vehicles purchases and other
miscellaneous factors. As the overhead charges of the spare parts products is the liability of the end
consumer so it will be charged during product delivery. The promotion expense includes facebook
and insta ads which will cost Rs. 1000/week and Rs. 1500/week on youtube.

--------------------------------------------------------------------------------------------------------------------------------------

10