AUTOMOTIVE & TRANSPORTATION SECTOR
For Daihatsu: VIETNAM AUTOMOTIVE MARKET ANALYSIS & MANUFACTURING JV PARTNER SEARCH
Our client, a leading Japanese automobile manufacturer, commissioned us to study the Vietnam automobile market and to evaluate a potential local manufacturing partner. Tasks:
Profiles of Major Players
? Players: Toyota Motor Vietnam (TMV), Truong Hai (THACO), GM (Chevrolet), Hyundai, Vinastar (Mitsubishi), Ford, Hino, Xuan Kien (Vinaxuki), SAMCO, Isuzu
? Profile Areas: Incorporation & Company Structure, Car-related Products & Accessories Sold, Revenue & Net Profit, Manufacturing Plant Locations, Sales & Marketing Offices, Distribution Outlets/Warehouses, Best-selling Brands, Pricing (prices and offers, pricing methods), SWOT Analysis Supplier Network
?Type (Vertical/Horizontal), Partners
? Classification by functions: common parts and functional parts.
? Classification by materials: plastic parts, rubber parts, metal parts…
? Classification by making methods: parts made by casting, welding, stamping out, bending, cutting Local Manufacturing JV Partner Profile
? Corporate History, Nature and Assets
? Sales Volume & Net Profit
? Chairman’s Business Career, Position and Reputation in Vietnamese Automotive Industry
? Strength in Connections, Networks and Influential Power with Government or Economic Circles
? Prospect about Sustainability in His Position in Economic Circles
? Future Expandability & Possibility of Downfall of His Company
Result? Client’s first partner choice turned out to be a poor one. In the midst of fieldwork, we searched for another optimum local manufacturing JV partner. Client was extremely satisfied with our recommended choice of partner.
Client Benefits? Progress now in JV negotiation. In process of re-engaging us to analyse Myanmar auto market.
For Mitsubishi Motors: AUTOMOTIVE PARTS SUPPLIER PARTNER SEARCH (INDIA, INDONESIA, THAILAND)
Our client, a leading Japanese automobile manufacturer, commissioned us to search for autoparts supplier partners for Merger & Acquisition or Alliance pre due diligence.
1. Autoparts Supplier Types
- Original Equipment (OE) Parts: OE Parts are used in the assembly of a new motor vehicle (automobile, light truck or truck) or are purchased by the manufacturer for its service network. There are 3 tiers.
- Aftermarket Parts:
- Replacement Parts and Accessories. These are automotive parts built or remanufactured to replace OE parts as they become worn or damaged.
- Accessories: These are parts made for comfort, convenience, performance, safety, or customization, and are designed for add-on after the original sale of the motor vehicle.
2. Local Autoparts Supplier Partner Profile
- Corporate History, Nature and Assets
- Sales Volume & Net Profit
- Products, Monthly Production Capacity, Production Facilities & Equipment
- Technology: Press Working, Mold & Dies, Sheet Metal Forming, Casting, Forging, Molding, Plating
- Category: Power-train, Chassis, Vehicle body, Running system, Interior, Others
- Tier 1 Customers that Tier 2 Supplier deals with
- End User (Carmaker Co)
Result? Client was satisfied with our recommended choice of shortlisted partners.
Client Benefits? Supply contract negotiation now in progress.
For York Transportation Equipment (Tata Group): THAILAND MARKET EXPANSION STRATEGY (TRUCK AXLE & SUSPENSION)
(Client awarded us its Letter of Commendation)
Objectives: The project’s strategic objective is to support the client’s strategic planning.
1. The Market Market demand/size, industry trends, scenario analysis, distribution analysis, import market)
Product Segments: a. Trailer Axles b. Trailer Suspensions (both Air Suspension and Mechanical Suspension product segments)
2. Competitor Intelligence
3. Branding Comparative Brand Perception of Trailer Builder B2B Customers (prices, service quality, delivery, technical specifications, credit terms, product quality, stock) Brand Feedback on York
4. Strategic Recommendations for Market Expansion
Result? For York, we developed a more comprehensive analysis of the market and a list of its target clients. Through its customer feedback, York also increased its understanding of its strengths and weaknesses against its competitors.
Client Benefits? Client was able to obtain a better understanding of the Thailand market. In 2010, client re-engaged us for its B2B Customer Lead Generation and Satisfaction Feedback campaign, contacting 86% of its Thailand potential clients.
For Honda Motor Company, Tokyo: SINGAPORE PASSENGER LAND TRANSPORT SERVICES STUDY
Client wanted to understand the environment for passenger land transport services (taxis, trains, car-sharing segments) in Singapore and whether or not it was feasible for them to enter the Singapore market with their electric vehicles and if so, what were the entry modes and which partners should they partner with.
Legal Environmental Analysis: included legal statutes, legal bodies and regulatory bodies, approvals required to introduce EVs to penetrate Singapore.
Business Environmental Analysis: Competition, competitor profiles (operations, corporate structure, corporate performance), alternative competing products/services to Client’s. We analyzed operations of 2 local transport companies.
Project tasks include the characterization of the operations, corporate structure and corporate performance of target companies. Potential customer demand (market size, annual growth rates, number of carparks, carpark operators and what changes are needed to implement new battery chargers and services).
Distribution and market segmentation: taxis, car-sharing and public trains.
Potential partners (their profiles, willingness to collaborate, terms and conditions).
Financial analysis (projected revenues, costs and profits).
Result: Conducted feasibility study of Singapore market entry. Projected revenue and profits, thus confirming that this market was attractive to enter only in the long run provided there was cost-sharing from partners for electric battery installations in MRT stations. In the short run, we proposed entering the rental market as a test bed for vehicle acceptance.
For General Motors Company: SOUTH KOREA: M & A TAKEOVER VALUATION OF DAEWOO MOTOR COMPANY Our consultant performed an M & A due diligence study. A South Korean company had valued itself at US$720 million while Client’s internal valuation of Korean acquisition target was US$220 million. Client had wanted an independent financial valuation of its takeover target while negotiations were underway.
Transactions flows and process flows of target were identified.
Flows analysis included material flows, product flows, service flows and financial flows. The objective of such identification was to eliminate inter-company transactions to accurately conduct a financial valuation of buyout target.
Result? A financial valuation was recommended that was marginally higher than our Client’s internal valuation.
Client Benefits? Client finalised their purchase price based on recommended valuation. Client subsequently bought a controlling interest in target, which exports cars and kits for assembly elsewhere.
For Japan External Trade Organization (JETRO): STUDY OF US CARMAKERS’ ASIAN AUTOMOTIVE STRATEGIES
Client was interested to understand the strategic context of the steps being taken by 2 American automotive manufacturers in Asia. Products analysed were passenger cars and commercial vehicles. Client gained an understanding of both targets’ strategies in Asia by our study of the targets’ operations, distribution and strategic alliances by product segments (passenger cars and commercial vehicles) by country (Singapore, Australia, Indonesia, Japan, Malaysia, Thailand, Taiwan, Korea).
For each of the 2 US automobile manufacturers, we studied their:
Core operations, approach to designing vehicle/series/model portfolio, major partnerships and alliances for manufacturing, R & D, equity and distribution, manufacturing policies, procurement policies in Asia, marketing and distribution strategies, and bottlenecks and problems in expanding business in Asia (e.g. credit crunch, local content, product mix).
Result? We assisted Japanese companies and Client by formulating an Asia strategy to meet the opportunities and threats posed by the US carmakers’ moves.
Client Benefits? Increased competitiveness of Japanese carmakers.
For Gartner Group, USA: JAPAN & INDIA AUTOMOTIVE SUPPLY CHAIN OEM SURVEY
Our client, a leading global research and advisory firm, conducted a worldwide study with automotive OEMs about their priorities. We were the sub-contractor to the Client.
Sample survey topics: a. Organizations’ business priorities and competitive differentiators b. Electronics and software in the automotive industry c. Collaboration with suppliers d. IT spending e. IT profiles and priorities Result? We assisted Gartner in improving their understanding of Asia automotive OEM priorities.
For an Australasian Airline Company: FREQUENT FLYER PROGRAM (FFP) TRI-ALLIANCE STRATEGY
Our consultant was commissioned to develop a Frequent Flyer Program (FFP) joint venture strategy between 3 Asia regional carriers. Tasks: Reviewed airline partners’ objectives, evaluation criteria, ‘best practice’ models and assessed the suitability of business models (centralized, franchise, or federation).
Result? After analysing little congruence of partner objectives as well as lack of agreement in required investments, we recommended that the tri-alliance be called off, specifically with its SE Asian carrier being an unsuitable partner.
Client Benefits? Client and its neighbouring carrier partner entered into a 2-party joint venture, omitting the third partner. Thus, a potentially bad tri-alliance was averted.
For Centre for Asia Pacific Aviation (CAPA): ASIA CORPORATE AIR TRAVEL MARKET ANALYSIS
Situation: We were commissioned by CAPA, Asia’s aviation association, to gain a better understanding of the Asia corporate air travel market for short-haul routes as its client, a proposed new Business-class airline, wanted to know the receptivity of the Business-class market, to gauge the market interest and to know the characteristics of corporate travel in destination markets. This study formed the basis of another investment feasibility study to justify setting up a new Business-class airline company in Singapore. The customer base was exclusively the original uplift/discharge point-to-point traveler, disregarding fifth freedom traffic. From 500 companies contacted, we conducted 22 company interviews and several Focus Group Discussions (FGDs). Tasks:
A. Characteristics of Business-related Asia Air Market (1. Market size; 2. Market value by travel budget; 3. Development opportunities)
B. Structure and Policies Associated with Corporate Travel Accounts (1. Thresholds for miles upgrade; 2. Executive/management designations eligible to participate)
C. Air Travel Patterns and Preferences of Companies and Individuals (1. Frequency; 2. Booking mode; 3. Most-flown destinations)
D. Key Determinants of Air Travel Decisions (1. Relative influence of aircraft type; 2. Pricing; 3. Product; 4. Schedules; 5. On-board/on-ground facilities)
Result? Our study revealed that the potential Business-class market acceptance was low as planned price point was only 20% lower than a market leading carrier’s Business class price. We recommended that the end user investor client focus on foreign MNC segments and the bigger local SME segment. A detailed corporate traveler brand and preference profile was developed.
Client Benefits? Based very heavily on our study, our airline association client recommended to its investor client that the proposed airline investment was not feasible.