Automobile Manufacturing in Pakistan; A case of Revo Car Revo word derived from “Revolution”. Revo car manufactured under the umbrella of AMC (Adam Motor Company). It was labeled as the first Pakistani car, as it was fully designed and assembled locally.

1. Automobile Manufacturing in Pakistan
A case of
Revo Car
Varda Shaikh 18S-MBA-BS19
Hiba Shaikh 18S-MBA-BS28
Mahgul Khan 18S-MBA-BS25
Maryam Qazi 18S-MBA-BS10
Sadqa Sheikh 18S-MBA-BS29
Kanza Khan 18S-MBA-BS08

2. • Revo word derived from “Revolution”.
• Revo car manufactured under the
umbrella of AMC (Adam Motor
Company).
• It was labeled as the first Pakistani car,
as it was fully designed and assembled
locally.

3. • The Revo car was priced at Rs269,000, which was 15%
cheaper than the hugely-popular Suzuki Mehran at the
time.
• Revo car launched in April 18 2005. But, within a year, it
ran into trouble and the plant had to be shut down in
2006.
• Despite all its promise, the company could sell only 600
cars, most of which were sold in Karachi.
• Company decided to re launch in 2014 but unfortunately,
it is still unable to capture the market.

4. Critical Analysis Behind The
Downfall Of
Adam Revo Car

5. •AMC started manufacturing different automobiles e.g. passenger cars, jeeps
and mini trucks, but, failing to do justice to any one of them.
1. Vast Scope &
Excessive Diversification
•Hired fresh graduates from NED University; as they all were new so, the
technical skills were missing.
2. Workforce Issues/Lack
Of Technical Skills
•AMC decided to follow a price cutting policy.
•Reduce the profit margins to capture the large market segment.3. Cost Issues
•Three big companies Toyota, Honda & Suzuki already dominated in the
established market. Revo didn’t come up with the breakthrough.
4. Lack Of Competitive
Advantage
•Former Prime Minister Shaukat Aziz made a verbal contract with feroz khan
(owner of AMC) that the government could easily bought 5,000-10,000 cars a
year BUT instead of buying they reduced the custom duties on imported cars.
5. Government Response

6. • Lack of working capital.6. Financial Issues
• Lack of resources restrained AMC from pursuing an aggressive
marketing promotion campaign.
• They failed to promote it as “first Pakistani car for family”.
7. Marketing
Issues
• As the sales were low, AMC shifted from quality vendors to local
vendors to reduce the cost.
8. Vendor Industry
issues.
• Kuwaiti and Dubai’s investors showed interest to invest in this
company but due to unstable political environment they
withdrew from AMC.
9. Volatile Political
Environment
• We, consumers do prefer imported goods over the local. This is
the main reason behind the failure of Revo car.
10. Consumer
Perception

7. Provide A Trajectory For The Revival
In The Context Of Innovation
Management

8. FROM THIS..
• AMC should make some improvement in its
National innovation system.
GOVERNMENT INDUSTRY
ACADMY/
INSTITUTIONS

9. ACADMY/
INSTITUTIONS
TO THIS..
GOVERNMENT INDUSTRY

10. R & D INNOVATION
MARKET
SHOULD FOCUS ON R&D
NEED-PULL MODEL

11. LEARNING
CYCLE
EXPERIENCE
Dissatisfaction
of customer.
Failure in
business.
REFLECTION
Observing and
reviewing the
existing
practices of
business.
CONCEPT
FORMULATION
Should think about
why this and happen
how to satisfy
customers and
Make successful
business
EXPERIMENTATION
Testing new ideas
and techniques to
improve
experience.

12. BLUE OCEAN STRATEGY TOOL
FOUR
ACTION
FRAMEWORK
ELIMINATE
Poor quality
material
Obsolete
technology
REDUCE
Risk
RAISE
Availability of
funds
CREATE
Competitive
advantage

13. BENCHMARKING
Benchmarking is comparing one's business best practices from
other companies.
• AMC had self-sufficiency in manufacturing for design. They
didn’t hire any foreign professional for this.
• For the successful revival, AMC has to benchmark.
• Like In India, TATA Indica outsourced design tasks for the
production of their local car, which is produced in India but
designed in Italy.
• AMC should take inspiration from them.

14. • AMC relied on its team solely. They should hire panel of experts
for predicting future outcomes according to which further
framework can be designed.
• For example: Hino Pak motors faced major downfall in 2002, due
to their poor quality manufacturing and inappropriate supplier
policy. To overcome this problem, they hired professionals. After
the whole process of applying expert panel they noticed a drastic
increase in their company’s sales.
• So AMC should adapt Delphi method like Hino Pak motors did.
DELPHI METHOD

15. • AMC had a vision to emulate the dynamic learning of the Japanese
automotive producers but forgot that leading manufacturers such as
Toyota and Hyundai.
• Rather than above AMC must focus on the strategies of the company
which are exists and operating in the Pakistan.
• Following the overall cost leadership market strategy, AMC has to very
defensive “play to not lose” & “me too” innovation strategy approach.
• They focus on replicating those technologies that are seen as standard
by the market, often buying innovative components from their
competitors to avoid expensive developments.
• Innovation Process As a “me too” company, their process is focused on
cost avoidance rather than the generation of new ideas.
Go For Technological Followership And
Me Too Innovation Strategy

16. • It found that a series of steady improvements via trial and error is
key to innovation over a prolonged period of time
• Strategy can also be made by experimentation and trial-and-
error. Companies can manage the risk associated to a new
strategy by experimenting in a limited way or limited area before
fully adopting the new strategy (C. Markides, 1997).
• The purpose of experimentation is to test the assumptions about
the numerous unknowns involved in a new business. “Starting a
new business is essentially an experiment. Implicit in the
experiment are a number of hypotheses (commonly called
assumptions) that can be tested only by experience. (Block &
MacMillan).
Trial And Errors In Strategic Innovation:

17. • Milestones are determined by significant events. Each assumption
must be tested with a milestone. Assumptions must be replaced
by information. Some milestones are: completion of concept and
product testing, completion of prototype, bellwether sale, first
competitive action, first significant price change,
• These milestones helps AMC in decisions, which are made as
milestones are passed, using the information learned to make go,
no-go, or redirection decisions.
• AMC used this technique to avoid or minimize the future risk by
this technique.
• Whatever the innovation tool chose by AMC, it is important to
repeated, varied attempts which are continued until success

18. Example:
Honda R&D Company
•This is where Honda’s fundamental
research take palace by using trial and
error strategy.

19. THANK
YOU