...LLC | All Rights Reserved The domestic automotive crisis embodies the perfect storm. The gale-forces our economy now faces are the result of a lengthy series of events that have effectively frozen consumer lending and generated an extraordinary global lack of trust across all investor categories. Attempts by the international market to hedge the crisis, through US currency devaluation, have only accelerated problems. The doubling of fuel prices had an immediate impact on the US consumer goods market, perhaps most visible in the automotive industry. This dramatically affected consumer buying habits, whose interest has shifted away from operationally expensive SUVs and resulted in substantially devalued new and used gas guzzlers. Automotive demand has now fallen to the lowest levels in 20 years, and had irreplaceable impact on the largest profit category of the industry. While we have seen a huge direct impact on the market’s perception of the auto industry’s viability, an even deeper crisis looms: Leased vehicles, a large proportion of which fall into the SUV & lower fuel-economy categories, are still on the industry books. These vehicles will be entering a redefined market with substantially lowered demand, and therefore require significant price discounts. Auto Inventory and Demand: Vehicle production has been cut, of course, yet the length of the global automotive supply chain is so long that reaction time to market conditions takes a seeming eternity to resolve...
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...shareholder of car manufacturer against Roger claiming that he violated his duty as a director by convincing the board to launch a Sports Utility Vehicle. Roger, as the director of the car manufacturing company, was quite positive on the successful launch of the sports utility vehicle. Roger tried to persuade the board because he researched and found that there was an increase in demand of sports utility vehicles. Also he found that most of the competitor companies have been successful with their launches. Roger realized that he wanted his company to take a piece of this successful market and insisted that the directors approve this new vehicle line. Analysis In this particular lawsuit filed by the stakeholder, Roger can defend himself against violating his duty as director which convinced the board to launch a Sports Utility Vehicle. Roger was thinking in the interest of the company by entering a market that their competitors had already...
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...| Brazilian Aftermarket | | 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...
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...Potential of Brazilian plastic industry for investment Assignment 02 ECON 5100 Report Objective The main objective of the report is to assuage the potential for investment in the plastics industry in Brazil by GE. To get a better understanding, the report has been broken down into four parts – 1. Evaluation of the Brazilian plastic industry, market structure and demand 2. GE and Brazil 3. The current health of the Brazilian economy measured by the major macro economic factors 4. Strengths and Weaknesses Brazilian plastic industry The Brazilian plastics industry comprises resin manufacturers, machine manufacturers, additives suppliers, tool makers and more than 11,000 converters and plastics recyclers. The major Brazilian resin manufacturers supply a wide profile of grades of plastics resins, such as Polyethylene (LLDPE and HDPE), EVA, Polypropylene, PP compounds, PVC (flexible, rigid and compounds), Polystyrene, PET, SAN, ABS, Polycarbonate and others. Additives, master batches and other basic chemicals are also provided by a number of other raw material suppliers. The industry offers a broad range of products for the automotive, electrical, electronics, IT, packaging, medical, household appliances, agricultural and construction industries. Having a strong manufacturing base with more than 11,000 companies, the Brazilian conversion industry operates with a variety of production processes, such as injection moulding, extrusion, blow moulding, thermoforming...
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...Potential of Brazilian plastic industry for investment Assignment 02 ECON 5100 Report Objective The main objective of the report is to assuage the potential for investment in the plastics industry in Brazil by GE. To get a better understanding, the report has been broken down into four parts – 1. Evaluation of the Brazilian plastic industry, market structure and demand 2. GE and Brazil 3. The current health of the Brazilian economy measured by the major macro economic factors 4. Strengths and Weaknesses Brazilian plastic industry The Brazilian plastics industry comprises resin manufacturers, machine manufacturers, additives suppliers, tool makers and more than 11,000 converters and plastics recyclers. The major Brazilian resin manufacturers supply a wide profile of grades of plastics resins, such as Polyethylene (LLDPE and HDPE), EVA, Polypropylene, PP compounds, PVC (flexible, rigid and compounds), Polystyrene, PET, SAN, ABS, Polycarbonate and others. Additives, master batches and other basic chemicals are also provided by a number of other raw material suppliers. The industry offers a broad range of products for the automotive, electrical, electronics, IT, packaging, medical, household appliances, agricultural and construction industries. Having a strong manufacturing base with more than 11,000 companies, the Brazilian conversion industry operates with a variety of production processes, such as injection moulding, extrusion, blow moulding, thermoforming...
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...Trade barriers occur because of government actions or inactions that result in a lack of ability or interest in trading across national borders. The North and South American automotive industry is a complex system which is highly sensitive to trade barriers, which I believe stems in part from the positive effect NAFTA has had on North American trade. Unfortunately, Brazil has implemented some protectionist trade barriers. Luiz Moan says Brazil needs to protect and maintain its automotive industry because of “competitiveness issues” with other countries. Maon has helped to create an agreement, which has limited the number of imported vehicles from Mexico, once again restricting the free trade agreement as they did before in 2012. This agreement...
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...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 need to update products and improve productivity and quality standards in local car and truck manufacturing. This has triggered an escalation in investment by assemblers. Total investment in the assembly industry in Brazil rose from US$5.4 billion, in the 1980s, to US$16.6 billion, in the 1990s, according to the Brazilian Automotive Industry Association (ANFAVEA). This figure...
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...1. Transcript of volkswagen do Brazil German multinational automotive Members: Natalia Mejia Andrea Rangel Karen Osorio Gustavo Victoria Carolina Mariño FACULTAD DE CIENCIAS ECONÓMICAS Y ADMINISTRATIVAS CLASS: Strategy in action. TEACHER: Sandra Jenina Sanchez. CASE: VOLKSWAGEN DO BRASIL Driving Strategy with the Balanced Scorecard 370.000 Employees Worldwide 61 Production facilities across 21 countries 151 Countries 10 Brands 6.3 million vehicles sold The Automotive Landscape in Brazil (cc) image by nuonsolarteam on Flickr It had the 5th largest land area and population It had the world's 9th largest economy Recently is the largest and most diversified economy in Latin America The automotive sector produced 19% of their GDP. +1.5 million of employes in +200,000 companies Brazil had a TIP capacity of 4 million vehicles per year Total revenue of $74 billion per year 6th largest producer of passenger vehicles 5th largest consumer market GLOBALLY Market share of 10.3% Revenues of €113 billion from sales Automotive Industry Volkswagen do Brazil VWB was the 3rd largest in the VWAG system behind China and Germany. It operated four plants. VWB produced revenues of €7.04 billion It employed about 22,000 people It's focused on small and medium sized vehicles VWB had the most complete portfolio within the brazilian market It offered 22 different models It has a modern product design prototype center located in Sao Paulo. 1953 Timeline Volkswagen do Brazil 1956 1st plant outside Germany...
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...facilities across 21 countries 151 Countries 10 Brands 6.3 million vehicles sold The Automotive Landscape in Brazil (cc) image by nuonsolarteam on Flickr It had the 5th largest land area and population It had the world's 9th largest economy Recently is the largest and most diversified economy in Latin America The automotive sector produced 19% of their GDP. +1.5 million of employes in +200,000 companies Brazil had a TIP capacity of 4 million vehicles per year Total revenue of $74 billion per year 6th largest producer of passenger vehicles 5th largest consumer market GLOBALLY Market share of 10.3% Revenues of €113 billion from sales Automotive Industry Volkswagen do Brazil VWB was the 3rd largest in the VWAG system behind China and Germany. It operated four plants. VWB produced revenues of €7.04 billion It employed about 22,000 people It's focused on small and medium sized vehicles VWB had the most complete portfolio within the brazilian market It offered 22 different models It has a modern product design prototype center located in Sao Paulo. 1953 Timeline Volkswagen do Brazil 1956 1st plant outside Germany Ipiringa VWB started with 12 employees 1969 50% produced in Brazil VWB had earned a 61% share of Brazil's car production 1970's Launched medium sized cars for export created the first ethanol-fueled vehicle 1990's 1986 20% of domestic automotive market Overcapacity and macroeconomic situation Brazilian production output (# of vehicles) 1.1 million (1993) 1.1 million (1999) 1.6...
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...The Economic side Brazil is: World’s second largest producer of organic foods World’s third largest producer of fruit World’s third largest consumer market for cosmetics World’ fifth largest country in population World’s seventh country in Internet usage World’s eighth largest consumer market World’s Twelfth largest economy World’s largest Catholic country Population: 205,716,890 (2012) Age Structure: 0-14 years: 26.2% (male 27,219,651/female 26,180,040) 15-64 years: 67% (male 67,524,642/female 68,809,357) 65 years and over: 6.7% (male 5,796,433/female 7,899,650) (2011est) Population growth rate: 1.102% (2012est) Birth Rate: 17.48 births/1,000 population (2012est) The average monthly income of Brazilian families in 2009(731 dollars) Income classes: Class A: above BRL 10.200 Class B: above BRL 5.100 Class C: above BRL 2.040 Class D: above BRL 1.020 Class E: below BRL 1.020 Total number of citizen in middle class: 95 Million (%52 of population) -2009 Lower class: 61 million. People live below the poverty line: %24. Business opportunities: Telecommunication business opportunities Franchise business opportunities Real Estate Investments Domestic demand is very strong, for example for cars, housing, or consumer durables GDP (purchasing power parity): $2.284 trillion (2011est) GDP - real growth rate: 2.8% (2011est) GDP - per capita (PPP): $11,600 (2011est) ...
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...Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2005, Ivey Management Services Version: (A) 2005-11-10 In early 2001, Richard Esposito, newly appointed vice-president of finance for Wiley International, had instituted a new format for the evaluation of offshore capital projects. Henceforth, all proposals with a total cost exceeding the equivalent of US$1 million were to be submitted to Chicago headquarters for approval by the Capital Budget Review Committee (CBRC) headed by Esposito. Among the first offshore proposals submitted to Esposito was a request from Wiley’s Brazilian division for the equivalent of $12.9 million to expand production of fractional horsepower motors. Because the forecasted internal rate of return provided by the division manager in Brazil was 19.7 per cent and this well exceeded the company’s hurdle rate of nine per cent, the division manager for Brazil strongly recommended that Esposito approve the expenditure. Since this was the first proposal...
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...1. Introduction Background/Product overview The global brand Freitag was established by the Brother Daniel and Markus Freitag producing customized bags. Freitag AG was set up in 1993 and is based in Zurich Switzerland. The two key point which gives Freitag the competitive advantage are they producing customized bags and using recycled material. The company has positioned itself as an environment friendly organisation by re-using industrial waste such as truck tarpaulins and seat belts for the bag and recycled bicycle and tires tubes which is used for the edges of the bags. The Brothers not only design bags also woman’s handbags, wallets, lap top bags, covers for apple products and the messenger bags which are only products once and many more other bags. Freitag has 9 stores around the world which are in Zürich, Berlin, Davos, Hamburg, Cologne, New York, Tokoyo, Wien and London and also uses 400 sales partners and there online shop which ships the products around the world. Each store is designed to reflect on the eco-friendly mission of the organisation one of the stores is build out of 17 recycled shipping containers and shelf’s out of recycled gym equipment’s. Freitag sold in 2011, 300.00 bags and accessories and the previous year 280.000 products. The demand for Freitag bags is very high with no competition using about 390 tons of truck tarpaulin each year however Freitag does face a challenge finding material to produce the products. Another advantage the organisation...
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...2000, an event that 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...
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...event that caught the 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 ...
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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 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 ...
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