COMPARATIVE ANALYSIS OF

CONSUMER PREFERENCE TOWARDS

LOCALLY ASSEMBLED AND
IMPORTED CARS IN FAISALABAD

By
Ahmad Jawad
Ali Raza
𝟏
MBA 2
𝟓

Session: 2017-2019
IBMS
UAF
i
Starting with the name of Allah, the most gracious, the
most merciful.

ii
Dedication
We dedicate this Project report to our parents
for their endless love, support and encouragement.
This Report would be incomplete without the
mention of the support given to us by our friends
and teachers.

iii
Acknowledgement:
our first and foremost thank to Almighty ALLAH the Merciful, The

beneficent, Who bestowed me with the ability to complete this work.

Next to Him, peace and blessings upon His beloved Prophet

HAZRAT MUHAMMAD (P.B.U.H) who is forever a beacon of

light and knowledge for humanity as a whole and is an ever

inspiration for all the learned means.

We would like to express our deepest sense of gratitude to The

Honorable Prof. Dr. Abdul Ghafoor for his patience, guidance,

encouragement and excellent advice throughout this study.

Ahmad Jawad
Ali Raza
Attay Mustafa

iv
Abstract
Since automobile industry is one of the biggest industries of
Pakistan so it is important to analyze the trend of cars and predict the
future preference of car buying in Pakistan.
In this project we have taken a simple random sample of 50
respondents from Faisalabad and analyzed the data in SPSS. On the
basis of results of this analysis, we have concluded that people of
Faisalabad prefer local assembled cars more than imported cars.

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List of Abbreviations

JDM………………………………………...Japanese domestic model

SPSS…………….…………….statistical packages for social sciences

CKD………………………………………… complete knocked down

MKD………………………………………… medium knocked down

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Table of contents

Sr.No Chapters Page No

1. Introduction
1.1 Types of cars in Pakistan
1.2 Objective

2 Literature view
Methodology

Analysis
5 Results and discussion
6 Conclusion
7 References
8 Appendix A
9 Appendix B

vii
Chapter 1
Introduction
History: Pakistan started assembling of brands of American and European vehicles in 50s
and Japanese brands in 60s.

Current situation: Despite lapse of more than half a century, the industry remains heavily
dependent on imported parts.

Reason: Some analysts attribute the prevailing situation to bad government policies and
others hold the local assemblers responsible, who have failed in developing a dependable
indigenous vendor industry. It is a common complaint that over the years the government has
been facilitating the assemblers and failing in protecting the interest of vehicle users.

1.1Types of cars in Pakistan

Local Assembled

As simple as it sounds, these are the cars that are assembled locally. They may as well
include the CKD (complete knocked down) or MKD (medium knocked down) units.Common
examples are Toyota Corolla, Honda City & Civic and Suzuki Cultus, Mehran etc.

Other than Toyota, Honda and Suzuki, there were more assemblers which used to operate
during the previous decade and certain vehicles were assembled locally, such as the Fiat Uno,
Chevrolet Joy, Nissan Sunny, Hyundai Santro, Kia Spectra etc.

The local assembled cars are usually considered easy to maintain since spare parts are easier
to get, they generally hold a decent resale value thus are preferred by a vast majority, apart
from the likes of Fiat Uno, Chevrolet Joy or Kia Spectra that weren’t quite successful &
quickly went out of production.

Imported

This term is usually applied to those vehicles that were built somewhere else (Japan,
Thailand etc) to be sold specifically in export markets (Pakistan). Such as the Suzuki Ciaz
and Vitara, Honda CR-V, Mitsubishi Lancer from Dewan era, Proton vehicles from previous
decade etc.

These cars are believed to be better compared to the local assembled ones. The built quality
and fit & finish is also superior than local ones. They may however lack certain safety
equipment such as airbags etc, since these cars are specifically made for certain markets.

Sometimes automakers introduce an initial batch of cars as an import to test the market
response and if all goes well, the company proceed towards assembling the vehicle locally.
Examples of such cars are FAW V2, Suzuki Liana, Chevrolet Joy and Nissan Sunny all of
which were initially imported but were assembled locally later on.

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JDM

It stands for Japanese Domestic Model and as the name suggests, these are the
vehicles that were produced specifically to be sold within Japan’s domestic market but were
later imported in our country under different schemes. If you compare the JDM version of
cars such as Corolla or Lancer with the ones available locally, you will find a lot of difference
both in terms of quality and equipment on offer.

These JDM vehicles are considered far superior than the above two types and offers
unmatched features & safety equipment. The built quality is also quite exceptional however
there are a few things to worry about these JDMs.

The spare parts are expensive or unavailable, particularly if you are living in smaller cities.
Most JDMs imported in our country are accidental & are repaired locally before reaching the
showrooms.

There are other problems such as low ground clearance, lack of spare wheel and no service
history etc. The multimedia systems are often in Japanese and are hard to decode. Spare parts
in certain cases have to be sourced from other countries and may take a while to arrive. Still,
if you get your hands on a JDM with genuine grade (4.0 or more) it’s quite a different and
amazing ownership experience altogether.

1.2Objective:
Is to check the consumer preference towards local assembled vs imported cars in
Faisalabad and find factors effecting buying decision.

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Chapter 2

Literature view:
Tuttle-Hollingsworth L. (2015) says the objective of this research is to review the
cross-cultural studies of the quality perceptions of American versus foreign products, over
time, to explain the growth of foreign car sales at the expense of domestic car sales in the
U.S. Three recent studies (Rogers National Research, Inc., 1979; Miaoulis, et al., 1980; and
Powers, 1980) were reviewed in which American consumers compared the characteristics of
U.S., Japanese, and German made cars. The general findings were that Japanese and German
cars were viewed as more reliable and better overall than American made cars; foreign cars
were in better condition at delivery from dealers; and new foreign car owners reported fewer
mechanical problems.

(Shende, 2014) studied that the automobile industry today is the most lucrative
industry. Due to increase in disposable income in both rural and urban sector and availability
of easy finance are the main drivers of high volume car segments. Further competition is
heating up with host of new players coming in and global brands like Porsche, Bentley, and
Ferrari all set to venture in Indian market. This research will be helpful for the existing and
new entrant car manufacturing companies in India to find out the customer expectations and
their market offerings. Indian Automobile car business is influenced by the presence of many
national and multinational manufacturers. This paper presents analysis of research in the area
of Consumer Behavior of Automobile Car Customer. Proper understanding of consumer
buying behavior will help the marketer to succeed in the market. All segments in Indian Car
industry were studied and found that buyer has different priority of behaviors in each
segment, whereas main driver for car purchase is disposable income. Value for money, safety
and driving comforts top the rank in terms of customer requirement; whereas perceived
quality by customers mainly depends on brand image. For this research, methodology
adopted was to study the research papers in the area of Passenger Car segment, study the
purchase decision process and its interaction with behavior parameters across all the
segments of car such as small & Hatch Back segment, Sedan class segment, SUV & MUV
segment and Luxury Car segment. The objective of this study is the identification of factors
influencing customer’s preferences for particular segment of cars. This paper also attempts to
consolidate findings & suggestions to overcome present scenario of stagnancy in sales and
cultivate future demand for automobile car market.

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Chapter 3
Methodology:
Primary data was collected using following technique: Questionnaire. A convenience sample
of n: 50 were taken. A frequency distribution analysis was conducted in SPSS.

Choice of scales:
Nominal scale:
Nominal scales are used for labeling variables, without any quantitative value. “Nominal”
scales could simply be called “labels. For example, in the case of a gender scale, an
individual can be categorized either as male or female. These scales are mutually exclusive
(no overlap) and none of them has any numerical significance. A good way to remember all
of this is that “nominal” sounds a lot like “name” and nominal scales are kind of
like“names”or labels.

Likert scale:
Likert scale, rating system, used in questionnaires, that is designed to measure people’s
attitudes, opinions, or perceptions. Subjects choose from a range of possible responses to a
specific question or statement; responses typically include “strongly agree,” “agree,”
“neutral,” “disagree,” and “strongly disagree.” Often, the categories of response are coded
numerically, in which case the numerical values must be defined for that specific study, such
as 1 = strongly agree, 2 = agree, and so on. The Likert scale is named for American social
scientist Rensis Likert, who devised the approach in 1932.

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Chapter 4
Analysis:
Age:
Frequency Percent
18-25 28 56
26-30 5 10
30 plus 17 34
Total 50 100

30
20
10
0

Interpretation: 56% of the respondents were youth and rest was adults.

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Gender:
Frequency Percent
Male 48 96
Female 2 4
Total 50 100

Interpretation: Most of the respondents were male.

Q: Which car do you have?

Frequency Percent
Honda 21 42
Suzuki 12 24
Toyota 13 26
Faw 1 2
Other 3 6
Total 50 100

Q: What kind of car do you have?

Frequency Percent
Locally assembled 37 74
Imported/jdm 13 26
Total 50 100

Interpretation: 74% locally assembled cars show that most of the cars running on the roads
are local assembled.

Q: For what purpose do you use your car for?

Frequency Percent
Personal 48 96
Commercial 2 4
Total 50 100

Interpretation: most of the respondents use their vehicles for personal use.

Q: In your personal opinion which is the best automobile company in Pakistan?

Frequency Percent
Honda 17 34
Suzuki 5 10
Toyota 23 46
Bmw 1 2
Audi 3 6

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Other 1 2
Total 50 100

Interpretation: with 46% area covered, Toyota is the most favorite car brand and Honda
comes at second place.

Q: How would you rate the following characteristics of your car?

A: Engine performance

Engine performance Frequency Percent

very good 18 48.6

Good 18 48.6
locally assembled
Neutral 1 2.7

Total 37 100.0
very good 8 61.5
imported/jdm Good 5 38.5
Total 13 100.0

Interpretation: Interpretation: adding the scores of “very good” and “good” options Local
assembled gets 97.2% and imported gets 100% which is a close result but it still means that
imported cars are more reliable than locally assembled cars.

Reliability/Durability

Reliability/Durability Frequency Percent

very good 11 29.7

Good 24 64.9

locally assembled Neutral 1 2.7

Poor 1 2.7

Total 37 100.0
very good 6 46.2

Good 5 38.5
imported/jdm
Neutral 2 15.4

Total 13 100.0

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Interpretation: Interpretation: adding the scores of “very good” and “good” options Local
assembled gets 94.6% and imported gets 84.7% which is a close result but it still means that
locally assembled cars are more reliable than imported cars.

Efficiency

Efficiency Frequency Percent

very good 12 32.4

Good 20 54.1
locally assembled
Neutral 5 13.5

Total 37 100.0
very good 6 46.2

Good 4 30.8
imported/jdm Neutral 1 7.7

Poor 2 15.4

Total 13 100.0

Interpretation: adding the scores of “very good” and “good” options Local assembled gets
86.5% and imported gets 77% which is a close result but still it means that locally assembled
are more fuel efficient than imported cars.

Spare parts availability

Spare parts availability Frequency Percent

very good 19 51.4

Good 16 43.2

locally assembled Neutral 1 2.7

Poor 1 2.7

Total 37 100.0
very good 4 30.8

Good 2 15.4

imported/jdm Neutral 3 23.1

Poor 4 30.8

Total 13 100.0

Interpretation: adding the scores of “very good” and “good” options Local assembled gets
94.6% and imported gets 46.2% which means that locally assembled
cars spare parts are easily available in the market than imported cars.

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Spare parts prices

Spare Parts Prices Frequency Percent

very good 12 32.4

Good 16 43.2

neutral 5 13.5
locally assembled
Poor 3 8.1

very poor 1 2.7

Total 37 100.0
very good 1 7.7

Good 3 23.1

neutral 4 30.8
imported/jdm
Poor 4 30.8

very poor 1 7.7

Total 13 100.0

Interpretation: adding the scores of “very good” and “good” options Local assembled gets
75.6% and imported gets 30.8% which means that locally assembled
cars have much cheaper spare parts than imported cars.
30.8% result for imported cars means that their spare parts are expensive.

After sale customer service

After sale customer service Frequency Percent

very good 15 40.5

good 19 51.4
locally assembled
neutral 3 8.1

Total 37 100.0
very good 1 7.7

good 4 30.8
imported/jdm
neutral 8 61.5
Total 13 100.0

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Interpretation: Interpretation: adding the scores of “very good” and “good” options Local
assembled gets 91.9% and imported gets 38.5% which means that locally assembled
Cars provide better customer service than imported cars.
38.5% result for imported cars means that their after sale customer service is poor.

Build quality

Build quality Frequency Percent

very good 6 16.2

good 14 37.8
neutral 13 35.1
locally assembled
poor 3 8.1
very poor 1 2.7
Total 37 100.0
very good 8 61.5

good 3 23.1
imported/jdm neutral 1 7.7

poor 1 7.7

Total 13 100.0

Interpretation: Interpretation: adding the scores of “very good” and “good” options Local
assembled gets 54% and imported gets 84.6% which means that imported cars are better in
build quality than locally assembled cars.

Resale value

Resale value Frequency Percent

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 very good 15 40.5

Good 17 45.9
locally assembled
neutral 5 13.5

Total 37 100.0
very good 5 38.5

Good 5 38.5
imported/jdm
neutral 3 23.1

Total 13 100.0

Interpretation: Interpretation: adding the scores of “very good” and “good” options Local
assembled gets 86.4% and imported gets 77% which means that local assembled cars are
better in resale value than imported cars.

Comfort Level:
Comfort level Frequency Percent

very good 5 13.5

Good 18 48.6

locally assembled neutral 10 27.0

Poor 4 10.8

Total 37 100.0
very good 7 53.8

imported/jdm Good 6 46.2

Total 13 100.0

Interpretation: adding the scores of “very good” and “good” options Local assembled gets
61.5% and imported gets 100% which means that imported cars are better in comfort level
than locally assembled cars.
Style/aesthetics

Style/aesthetics Frequency Percent

very good 11 29.7

good 18 48.6
locally assembled neutral 6 16.2

Poor 2 5.4

Total 37 100.0
very good 7 53.8

good 4 30.8
imported/jdm
neutral 2 15.4

Total 13 100.0

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Interpretation: adding the scores of “very good” and “good” options Local assembled gets
77% and imported gets 83% is a close result but it still means that imported cars are more
stylish than locally assembled cars.

Value for money

Value for money Frequency Percent

very good 9 24.3

good 16 43.2

neutral 6 16.2
locally assembled
Poor 4 10.8

very poor 2 5.4

Total 37 100.0
very good 8 61.5

good 4 30.8
imported/jdm
neutral 1 7.7

Total 13 100.0

Interpretation:
Q: How satisfied are you with your car?

Frequency Percentage
Very satisfied 17 34
Satisfied 31 62
Neutral 1 2
Unsatisfied 1 2
Total 50 100

Interpretation: 34+62 people are satisfied which shows a good amount of satisfaction level.

Q: While purchasing a car which condition will you prefer?

Frequency Percentage
Brand new 28 56
Second hand/used 13 26
Both 9 18
Total 50 100
Interpretation: 56% people will prefer brand new cars, which shows a good purchasing power
of consumers.

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Q: Which car would you like to buy in the future?

Frequency Percentage
Locally assembled 27 54
Imported/jdm 15 30
Both 8 16
Total 50 100
Interpretation: 54% respondents have said they will prefer locally assembled cars over
imported, and 8% are likely to buy both.

Q: which car will you recommend to your friends and family?

Frequency Percentage
Locally assembled 25 50
Imported/jdm 14 28
Both 11 22
Total 50 100

Interpretation: the tendency to buy locally assembled car is more than imported cars.

Chapter 5
Results and discussion:

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 As automobile industry is rapidly growing and new players are also entering the
market it is necessary to check the consumer trend how consumers are reacting to auto
industry policies?

Chapter 6
Conclusions:
From the results obtained we have concluded that people will prefer local assembled
cars over imported cars, as 54% of them are likely to buy local assembled and 30% imported
and the rest 16% are willing to buy both.

Chapter 7
References:
1. Tuttle-Hollingsworth L. (2015) The Quality Perceptions of U.S. and Foreign Cars in the
U.S. and Japan. In: Bellur V. (eds) The 1980’s: A Decade of Marketing Challenges pp 225-
230

2. Shende

3. www.pakwheels.com
4. https://www.carspiritpk.com/2018/03/10/understanding-jdm-imported-local-assembled-
cars/

5. www.pakistaneconomist.com
Appendix A:
Comparative analysis questionnaire

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This study has been conducted as a business research assignment. This is a questionnaire
survey for “comparative analysis of consumer preference towards locally assembled and
imported cars in Faisalabad”. This study is intended for educational purpose only, and not
for any commercial purposes. This questionnaire is randomly distributed among general
public of Faisalabad. It will be completely anonymous.

Name: __________________________ Age: _______________________________

Gender: ________________________ occupation: _________________________

Please complete the following question by ticking the box ☑ or writing brief
information on the space provided.

Q1: Which car do you have?

☐Honda ☐Suzuki ☐Toyota ☐FAW

☐BMW ☐Audi ☐Mercedes

☐Other _______________________________

Q2: Write the model name of your car? E.g. Toyota corolla, vitz, Suzuki cultus, wagon r,
Honda city, civic etc.

Model name: _________________________________________________________

Q3: What kind of car do you have?

☐Locally assembled
☐Imported/jdm
☐other

Q4: For what purpose do you use your car for?

☐Personal use
☐commercial use (uber, careem, taxi)
☐both

Q5: In your personal opinion which is the best automobile company in Pakistan?

☐Honda ☐Suzuki ☐Toyota ☐FAW

☐BMW ☐Audi ☐Mercedes

☐Other ________________________

PTO

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Q6: How would you rate the following characteristics of your car? Tick the box✔

Very good Good Neutral Poor Very poor

Engine Performance (power of
engine)
Reliability/durability(less mechanical
work required)
Efficiency (mileage per liter)
Spare parts availability(easily
available in the market)
Spare parts prices
After sale Customer service(service
from the company)
Build quality( Interior, Exterior)
Resale value
Safety features
Comfort level (seats, suspension, ride
etc.)
Style/aesthetics (looks of the car)
Value for money (is it worth the price it
cost)

Q7: How satisfied are you, with your car?

☐Very satisfied ☐satisfied ☐neutral ☐dissatisfied ☐very dissatisfied

Q8: While purchasing a car which condition will you prefer?

☐Brand new ☐Second hand/ used

☐Both

Q9: Which car would you like to buy in the future?

☐Locally assembled ☐Imported/jdm

☐Both ☐none of them

Q10: Which car will you recommend to your friends and family?

☐Locally assembled ☐Imported/jdm

☐Both ☐none of them

THANK YOU FOR YOUR PRECIOUS TIME

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