...Problems in Lada Do Brasil: 1. High inflation rate: The inflation rate in Brazil was very high despite the stabilization attempts of the government. The government had only managed to bring down the rate of inflation from 1477% in 1990 to 480%in 1991. High inflation rate meant the price of the cars were very high which has affected consumers' willingness to purchase the cars. Recommendation: According to purchasing power parity theory, the only change happen in prices between two countries is because of inflation. Country with higher inflation rate often experiences the value of their currency depreciates. Whenever in Brazil situation high rate of inflation rate exists and car prices go up and affecting customer willingness to purchase. In this situation to increase the sell, company can offer flexible loan policy or government policy may have positive effect eg. Reduce the tax charges on car. 2. Depreciation of cruzeiro: the economy was still in recession and the dollar value of the cruzeiro kept declining. In November, it depreciated by 26%. therefore the prices for the cars increased by 26% for Lada do Brazil. Recommendation: As said earlier country with high inflation rate often experiences less strength of their money and depreciates the value of money against other currency. One of the steps to decrease the inflation rate is, government can inspire to export more, which will make demand of Brazilian currency to other country, and the currency price will go up...
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...BRIC Markets Lessons for Indian Car Manufacturers December 2011 www.deloitte.com\in ons for Indian Car Manufacturers Contents Executive Summary Introduction Overview Brazil Russia India China Conclusion Appendix Sources Contacts 4 6 7 10 15 19 24 29 31 33 34 Executive Summary The BRIC block has emerged as the economic power house of growth for the automotive industry through the last decade. What started as an exploration of new/extra markets for car sales in the early 90s has gone on to become the mainstream market of the new millennium. Supported by attractive macro-economic factors such as growing economic activity, urbanization, rising household incomes, developing credit markets and very low car density, the BRIC countries currently make up for the top 7 automotive markets globally. The BRIC block has been strongly growing for over 10 years; with 3 of 4 BRIC economies surging ahead even during the 2008 economic crisis. So that prompts us to ask how the dynamics have transformed over the years. What were the major drivers of growth in car sales in the last decade and into the future? Is the current slowdown a blip or is it here to stay? More importantly, what does the growth dynamics in China, Brazil and Russia mean to the Indian automotive market? We offer our perspective on the impact of macroeconomic factors on car sales in the BRIC block between 2001 and 2011. Below are the key findings of our analysis: 1. Car sales in Brazil, Russia, India and China grew...
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...SWOT Analysis – Autolatina Example of Two International Companies Joining for Business in a Third Market STRENGTHS • Combination of two well established strong brands • Market Leaders in a protected market o 60 percent in the Brazil o 30 percent in Argentina • Combine operations in order to overcome obstacles in the Brazilian market. • Share the risk of operating in a volatile market • Offer wide range of products to meet different customers’ requirements in an environment where noncompeting models exists • Strong engineering capabilities • Wide range of distributors and dealers • Fast revenue growth • High Brand Equity • Big success in a market protected from foreign imports. • Offered inexpensive models, with different sizes. • Focus on Innovation o VW focused on building small cars o Ford focused on building bigger cars and pickup trucks o The two partners also produced shared products • The firms unified their marketing and sales staffs • Hired specialists and consultants to accommodate the two different company cultures. • Production of Autolatina cars grew rapidly over time. • At some point of time both companies had succeeded in identifying the key factors contributing to Autolatina’s success • Reasonably well integrated operationally even exchanging model fabrication • Consolidation reduces cost of administration and value-chain activities, WEAKNESS • Autolatina was unprepared by renewed economic growth. • Autolatina’s products, built for...
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...these programs are new to many countries, Brazil has years of experience with sugarcane-based ethanol, creating a success story for others to reference. Currently, Brazil is the largest biofuel market with the United States ringing in a close second. However, Brazil’s ethanol is created from sugarcane while the U.S. uses corn to produce their ethanol. Not only is Brazil’s sugarcane-based ethanol the first renewable fuel to be cost-competitive with transportation fuel, but it is also the most economical compared to its competitors. The ethanol’s efficiency is due to the power of the sugarcane compared to corn as an ethanol feedstock, a perfect climate for sugarcane harvesting, and the large, unskilled, inexpensive labor force in Brazil. In addition, the U.S. uses almost double the amount of land to farm corn to produce ethanol as Brazil uses to harvest sugarcane to produce almost the same volume as ethanol. What is Ethanol? Ethanol is an alcohol fuel distilled from plant materials, such as corn and sugar. Ethanol is the main biofuel for transportation and Brazil is the greatest exporter globally of bioethanol. The sugar and ethanol industry in Brazil make up 2.3% of the Domestic Gross Product, generating 4.5 million jobs for Brazilian citizens. Not only is ethanol responsible for 50% of fuel volume consumed by cars and light vehicles, but it also represents 90% of gasohol, a blend combined with gasoline, used by many oil companies. Brazil consumes 31% of global ethanol consumption...
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...these programs are new to many countries, Brazil has years of experience with sugarcane-based ethanol, creating a success story for others to reference. Currently, Brazil is the largest biofuel market with the United States ringing in a close second. However, Brazil’s ethanol is created from sugarcane while the U.S. uses corn to produce their ethanol. Not only is Brazil’s sugarcane-based ethanol the first renewable fuel to be cost-competitive with transportation fuel, but it is also the most economical compared to its competitors. The ethanol’s efficiency is due to the power of the sugarcane compared to corn as an ethanol feedstock, a perfect climate for sugarcane harvesting, and the large, unskilled, inexpensive labor force in Brazil. In addition, the U.S. uses almost double the amount of land to farm corn to produce ethanol as Brazil uses to harvest sugarcane to produce almost the same volume as ethanol. What is Ethanol? Ethanol is an alcohol fuel distilled from plant materials, such as corn and sugar. Ethanol is the main biofuel for transportation and Brazil is the greatest exporter globally of bioethanol. The sugar and ethanol industry in Brazil make up 2.3% of the Domestic Gross Product, generating 4.5 million jobs for Brazilian citizens. Not only is ethanol responsible for 50% of fuel volume consumed by cars and light vehicles, but it also represents 90% of gasohol, a blend combined with gasoline, used by many oil companies. Brazil consumes 31% of global ethanol consumption...
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...15 years. All car assemblers relied on local engineering teams to adapt products developed abroad to specific local conditions such as bad road conditions and usage (which required more robust suspensions), climate differences (asking for changes in materials), ethanol fuel, lower consumer income (demanding cheaper components and less accessories), consumer tastes and so on. 4 The strategy of manufacturing for the local market has not required significant technological activity. The share of engineers working in the assembly industry in Brazil in the industry total employment is an indicator supporting such argument. In the 1980s, it was less than 1% (Quadros, 1993). By the early 2000s, the share had quadrupled. Major changes in the Brazilian automotive market and industry occurred in the early 1990s. These changes implied a significant redefinition in the local PD strategies of car assemblers. Two elements influenced these changes: trade liberalisation and government policies specifically focused on the automobile sector. 2.2 Trade liberalisation and growth in local demand The process of trade and investment liberalisation in the Brazilian economy started in the early 1990s, following the inauguration of the government of the first elected President after military rule. Brazilian assemblers were not prepared to face the competition of imported vehicles. The sudden explosion in vehicle imports intensified domestic competition and showed the...
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...is supported with different theories such as SWOT analysis, PEST analysis, Porter 5 Forces, 4Ps. 1.1 Chery at a Glance Chery is one of the Chinese fast growing state owned enterprise founded on 1997.with a capital of CNY 3.68 billion, and its first car came on a production on 1999. At present Chery owns for sub-brands, chery, karry , Rilich and rely. Currently Chery has 16 different module in maket and it possesses an annual production capacity of 900,000 automobiles. (Chery) . With the strategy of ‘Going out’ Chery become the first Chinese automobile company to export its production in overseas, including more then 80 countries. It offers cars, sedans, SUVs, and mini-vans on its different segment. Source – Chery International Co. ltd This figure show that, the total sale of Chery automobile is been increasing in every year, in the year 2008 its sale is 356,000 unit which is decrees by small present comparing to 381,000 on previous year 2007. Competition is the causes as Chery Chairma Yin Tongyue said “Competition in the Chinese automobile market would be extremely fierce this year” (Reuturs, 2009) and due to the effect of global recession. 2. Chinese auto market Source- china car times According to the, china car times. Top 3...
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...coaster. 2009 Sales dropped in 50%, stabilize in 2010 Annual growth of 15% per year through 2014 Russia China The largest one. Share in 53% in 2008 Share is expected to be 61% in 2014 Brazil The most mature and stable market. Probably remain the second largest to 2014 Outpace both Brazil and China in growth India Summary • • • • • • The 4 BRICs are different There is no standard BRIC car Brazilian favor sporty hatchback Russians – western sedans and SUV Indian seeks ultra-low-cost minicars China – affordable luxury style sedans Brazil • The largest South America’s largest economy • Population close to 200 mln • GDP per capita of US$ 10 300 • The rapid growth of China’s economy has dramatically increased export demand for Brazil’s raw materials Brazil, history • • • • 10 years ago was a less confident place Economic crisis, history of inflation Political disarray with deep structural problems Seemed destined to remain a country with a great unrealized potential Brazil now • Quiet optimism that the country has been set on a more stable path • Still high level of poverty and corruption • But a sense of underlying progress with evidence in official statistics • Incomes are up • The gap between Brazil’s rich and poor has closed a little Brazil now • Locals treat the improvements due to just departing president Luiz Iinacio Lula da Silva (ince 2002) • The country last entered the global economic crisis • One of the first to come out of...
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...| | Demographics Brazil is the largest country in South America that specializes in agriculture mining, and the manufacturing service, however, the Brazilian Aftermarket is one that is on the rise. Brazil is the 5th largest country in the world that is home to 205 million people, with the majority of the people living along the coast. The median age is 30.7 with 43.7% of the population being in the 25-54 year range. More than half of Brazil’s population, 53% is considered to be the middle class, however, poverty levels still remain high. The United States, on the other hand, is the third most populous country with 322 million people. Depending on the location, and class model used, the middle class can constitute anywhere from 25%-66% of American households. The median age is also a little higher than that of Brazil’s at 36.8 years (The World Factbook , 2015). The Market Brazil has a very large market with many positive advantages. The nation’s highly protected economy offers limited opportunities for significantly increased exports. The United States shipped $1.1 Billion in auto parts exports to Brazil in 2014. The International Trade Administration ranked Brazil as the 23 best market for original equipment parts and 27 for aftermarket products through 2020. For most firms seeking access to the Brazilian Market, it is through the supply chains of vehicle assemblers or large parts firms that are already producing in the market. Brazil is the fourth largest auto...
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...long-term projections for the BRICs look more, rather than less, likely to be realised. It is now possible that China will become as big as the US by 2027, and the BRICs as big as the G7 by 2032. Within the BRICs and N-11, China, Brazil, India, Indonesia and the Philippines appear to be performing best. Bangladesh, Egypt, Korea, Nigeria, Turkey and Vietnam form a second group of countries that have performed broadly in line with expectations. Iran, Mexico, Pakistan and Russia have need for improvement. We show the ongoing dramatic BRIC influence in key product markets, with autos and crude oil as examples. Important disclosures appear at the back of this document Thanks to Dominic Wilson, Michael Buchanan, Paulo Leme and Swarnali Ahmed for their valuable comments, and to Alex Kelston for the Growth Environment Scores Jim O’Neill and Anna Stupnytska December 4, 2009 Goldman Sachs Global Economics, Commodities and Strategy Research Global Economics Paper Contents Summary Section 1. Where We Stand on the BRICs and N-11 Section 2. The BRICs and N-11 in the Aftermath of the Crisis 2.1 BRICs and N-11 Global Importance Continues to Rise 3 4 6 6 Higher growth contribution Increasing trade shares Rebalancing current accounts Domestic demand and economic resilience 2.2 BRICs Market Performance in Context 6 8 8 9 10 Deeper falls and sharper bounces in equities Currency performance Powerful new signs in terms of monetary policy 10 11 11 Section 3. Our...
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...caught the eye of professionals and academia both in Brazil and abroad. The core notion was: to sell cars made-to-order for final consumers. The project, known internally by the handle “blue macaw,” was considered to be a true landmark for the world’s automotive industry. The Gravataí plant brought about a true revolution in how cars were made, from its concept to the direct-sale model, through its production management system. The lessons learned during the experiment were relevant because they contributed to the establishment of a new production model, helping put the world’s automotive industry on a new path. The plant was working at full capacity especially during the first years, and the production during this period is shown in the table below. The extraordinary increase in production in the last seven years is evident. The idea was to deliver a car assembled as per the consumer’s own specifications in the shortest possible time, at a cost lower than that of the traditional make-to-stock mass-production system. Year 2000 2001 2002 2003 2004 2005 2006 2007 Production 24,007 91,407 109,916 115,304 136,114 135,097 140,994 192,272 The Background of the Brazilian Automotive Industry In the ’90s, three big experiments were done in Brazil. The Gravataí GM complex (GMBG), the Ford Camaçari complex and Volkswagen plant in Resende, each with specific characteristics. The Ford and GM plants manufactured passenger cars and Volkswagen made light trucks, also built-to-order...
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...eye of professionals and the academia both in Brazil and abroad. The core notion was: To sell cars made to order for final consumers. The project, known internally by the handle “blue macaw,” is considered to be a true landmark for the world’s automotive industry. The Gravataí plant brought about a true revolution in how cars are made, from its concept to the direct-sale model, through its production management system. The lessons learned during the experiment are relevant because they contribute to the establishment of a new production model, helping put the world’s automotive industry on a new path. The plant was working at full capacity especially during the first years, and the production during this period is shown in the following table. The extraordinary increase in production in the last 7 years is evident. The idea was to deliver a car assembled as per the consumer’s own specifications in the shortest possible time, at a cost lower than that of the traditional make-to-stock mass-production system. 2000 Year Production 24,007 2001 91,407 2002 2003 2004 2005 2006 2007 109,916 115,304 136,114 135,097 140,994 192,272 The Background of the Brazilian Automotive Industry In the 90s, three big experiments were done in Brazil: The Gravataí GM complex (GMBG), the Ford Camaçari complex, and Volkswagen plant in Resende, each with specific characteristics. The Ford and GM plants manufactured passenger cars and Volkswagen made light trucks, also built-to-order...
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...professionals and academia both in Brazil and abroad. The core notion was: to sell cars made-to-order for final consumers. The project, known internally by the handle “blue macaw,” was considered to be a true landmark for the world’s automotive industry. The Gravataí plant brought about a true revolution in how cars were made, from its concept to the direct-sale model, through its production management system. The lessons learned during the experiment were relevant because they contributed to the establishment of a new production model, helping put the world’s automotive industry on a new path. The plant was working at full capacity especially during the first years, and the production during this period is shown in the table below. The extraordinary increase in production in the last seven years is evident. The idea was to deliver a car assembled as per the consumer’s own specifications in the shortest possible time, at a cost lower than that of the traditional make-to-stock mass-production system. Year Production 2000 2001 2002 2003 2004 2005 2006 2007 24,007 91,407 109,916 115,304 136,114 135,097 140,994 192,272 The Background of the Brazilian Automotive Industry In the ’90s, three big experiments were done in Brazil. The Gravataí GM complex (GMBG), the Ford Camaçari complex and Volkswagen plant in Resende, each with specific characteristics. The Ford and GM plants manufactured passenger cars and Volkswagen made light...
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...Table of Contents Executive Summary………………………………………………….2 History of General Motors…………………………………………...3 General Motors Exports to Argentina………………………………3 General Motors Exports to Brazil…………………………………...4 Trade Agreement between South America………………………...5 General Motors and WW II…………………………………………...6 General Motors in South Africa………………………………………7 General Motors in China………………………………………………7 The Chevrolet Brand…………………………………………………..8 Conclusion………………………………………………………………9 Works Cited……………………………………………………………..10 Executive Summary General Motors (GM) is one of the big three auto makers in the world and they have built some of the most famous vehicles on the road which have met all different types of consumer’s needs. General Motors has taken an unexpected turn in the past several years for the worse due to the changing economy that is affecting the world. Many economists claim that the United States has been pressed into a recession that started with the housing crisis in 2008. From this crisis restricted a major banking crisis that has led to financial institutions implementing tighter lending guidelines for businesses. This has greatly affected General Motors since the company relies heavily on short term returns. Out of all the auto making companies during the crisis of falling sales and crashing returns, General Motors was hit the hardest and filed bankruptcy. The fact that General Motors has such a large portfolio is working directly against...
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...Luxury Car Retailing & Trends Executive Summary A luxury car is indeed a status symbol that is a reflection of one’s personality and power in society. There is a steady increase in luxury car customers globally as there is a rise in income, wealth and urbanization. It is more of a dream come true of the rising middle class to purchase and own a luxury car. After the global financial crisis (Reyneke et al., 2012) hit the luxury auto market, it was interesting to find that the younger generation maintained their spending habits and joined the baby boomers who were already major consumers of luxury cars. However, the concept of cars being a boy toy has certainly evolved with the emergence of female consumers . These women are driven by their need to showcase their power and independence. The finest example are the Chinese and Middle Eastern women who have come out of their cocoons and protested against a male dominated culture and purchasing luxury cars were a part of that change. As the younger generation have become more environmentally conscious, luxury car retailers have adopted the ‘go green’ concept by bringing out diesel run and electric cars. Another trend that is picking up is the customization of cars. Luxury car retailers have chosen to customize their car for their customers providing them exclusivity and satisfaction as the customers get what they exactly want. The sales for luxury cars from 2012 to 2014 have been forecasted to increase steadily but there are...
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