ford final recommendations indonesia
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TRANSCRIPT
Ford Motor CompanyIndonesia Entry Strategy
Eric ChanNaveen CheerathDandan ChenLeslie ForteLance KimWenfeng TangRenzhong YuLele Zheng
Agenda
Indonesia Overview
This is an example text. Go ahead and replace it
Conclusion
Competitor Analysis
Supply Chain
Questions6
5
4
3
2
1
Marketing
Overview on Indonesia
ASEAN
• A geo-political and economic organization – 10 nations– 3% of total land area of Earth– A population of approximately 600 million, 8.8% of the
world’s population– As a single entity, the 8th largest economy in the world
• Average GDP growth rate 2007- 2012: 5.1%• GDP per capita: $5,807
Data source: http://www.dfat.gov.au/geo/fs/asean.pdf
Demographic
• Indonesia is the doorway to Southeast Asia’s 650 million inhabitants
• Population: 240 million; Around 58% population live in Java
• GDP: 846.8 billion• Average economic growth rate: 6%• Average per capita income US$3,500• Encouraging FDI policies• Car ownership: 45 vehicles per 1,000 people
Indonesia market & GDP
2008 2009 2010 2011 2012
-25.00%
-15.00%
-5.00%
5.00%
15.00%
25.00%
35.00%
45.00%
55.00%
Market growth rate & GDP growth rate
Car sales growth rate GDP Annual Growth Rate
http://www.indonesia-investments.com/news/todays-headlines/indonesias-car-industry-continues-strong-growth-in-q1-2013/item634http://www.tradingeconomics.com/indonesia/gdp-growth-annual
Macro Economy
• Strong economic expansion• Record low interest rates• Auto market has expanded rapidly • Expect Indonesia to emerge as the largest auto
market in Southeast Asia in 2014• More interconnected with ASEAN
economy
Consideration of model selection
Affluent class with a disposable income above $7,500 a month
6.6% of country’s 240 million people, possible reach 16.5% in 2020
Luxury and sports cars are becoming a more common sight, particularly in the capital, as Indonesia's elite grows. It is forecast to jump from around six million people to 16.6 million
Model selection
Indonesia's car market is dominated by van or Multi Purpose Vehicle (MPV)
A kindly of utilitarian, capacious vehicles – a low-priced seven-eat multipurpose vehicle
Demand for light vehicles is expected to grow rapidly. Mostly young and techno-savvy, discerning
consumers…who want cars that match with their gadgets and lifestyles.
Current Ford Lineup
Model Recommendation
Explorer
Flex Crossover
Ranger
Escape
? Lincoln Navigator
Competitor Analysis
Competitor Analysis
• Japanese brands have about 95% of the market.• Low- med end vehicles dominate the market-
95%• Customers have more preference of MPV.• Indonesia car sales increased by 17.8% in Q1
2013.
Big Four39.1%
15.9%
14.6% 12.1%
1.2%
Favorite Models
• Suzuki invested $80 million in expanding
production in Indonesia.• Toyota invested $20 million in expanding
production in Indonesia.• Mitsubishi will invest $1.8 billion in five years in
Indonesia.• Daihatsu plan to invest $24.6 million in
Indonesia.• Chrysler plan to invest $10 million in Indonesia.
Competitor News
• In Q1 2013, Sales growth of Toyota: 8.4%,
Daihatsu: 5.2%, Mitsubishi: 8.2%, Suzuki: 70.4%, Honda: 228.8%
• Benz, BMW, Chevrolet increased assembling rate to decrease taxes.
• Chevrolet restored its factory in Indonesia to manufacture Chevrolet Spin to compete with Toyota Avanza.
Competitor News
Marketing
“Ford goes further to build great, environmentally sound products, a strong global business and a better, more humane world. We go further every day by offering vehicles with innovative technologies, plug-in hybrids and EcoBoost® engines that combine power and efficiency”
Go Further
Traditional Marketing
• 75% marketing budget spent in traditional media (print, television, etc)
#SocialMedia
Strategy: to humanize the company by connecting consumers with Ford
employees and with each other when possible, providing value in the
process.
Ford Dealers in Indonesia
Sumatra - 9
Papua - 5
Bali - 3
Kalimantan - 6
Java – 28
Sulawesi - 3
Television accounted for more than 60% of ad spending, followed by newspapers (34%) and magazines (3%)
• Television is the dominant source of news and entertainment.– Over 90% of Indonesian households
have a TV set
• Spend about 40% of time watching television
• Main focal point for social gatherings– Main viewing times are in the evening
• Affluent communities have cable
Television
http://adage.com/article/adagestat/stat-day-mists-mobile/230750/
Mobile Growth
(81.0%) Indonesians now saying they have a mobile
phone in their household, up from two-thirds (67%) in 2011
(49.8%) Indonesians now say they use SMS/text
messages at least once a week to get news
Recommendation
Hitting the television market first will ensure the largest amount of exposure to consumers because of the high existing amount of television viewers
Television
Waiting and strategically implementing mobile device marketing campaigns, Ford can effectively target this growing segment over time
Mobile Device
Once online penetration increases, Ford can deploy full forced online marketing and social media campaigns.
Internet
1
2
3
Supply Chain
Operation and Supply-Chain
2013
1999
1995
Distribution in partner with RIMC
Held 100 million Supply-Chain project in Indonesia
Cars are Imported from Thailand. Distribution with IndoMobile
Current Operation is managed by Ford’s ASEAN Region
Demand
ASEAN Operation keeps inventory at dealership at a minimum
Demand
Waitlist is provided for car buyers and depends on the model, wait time ranges from 5 days to 6 months
D
em
an
d
Supply-Chain
Thailand’s Hub Manufacturing
Supply
Challenges in Supply-ChainIndonesia currently lacks infrastructure to support plant operation and export.
Takes 18 days for to export and 21 days import (Documentation to port handling)
40% of the roads lack the ability to handle standard 40 ft. freight trucks (20-25 tons)
Ford lacks a strong local distribution network & partners
Ford’s shift of investment in 1999 still has lingering effects. A distrust among local dealerships.Local partnership is not exclusive. IndoMobile also operates JV with VW, Nissan, Volvo etc.
Demand forecast is grouped with other ASEAN
Recommendation
• Regional Development of Production and Supply Chain in ASEAN
Reasons:
1). 2 Billion potential customers and reached $5k-$6k per capita income level
2). Till 2020, Industry volume 32MM units to 52 MM units, APA accounts for 46% of global automotive industry and over 60% of its growth.
3).Align capacity with demand means adding a significant amount of capacity the next several years
4). One ford plan : produced on global platforms with 80% parts commonality and gives us the scale generate profit
5). Elimination or lower tariff barrier
6). Utilize the different advantages in different countries
Recommendation
• Expand dealer network in Indonesia to accommodate sales growth
• Provide the car models that fit for the regional consumer needs( quality, fuel efficiency, safety, smart tech)
• Enhance consumer satisfaction through the 3S service concept ( Sales-service-spare part)
• Cooperate with 3rd party to facilitate the process
Verdict
Questions?