2. Executive Summary
Opening up exclusively for the lower income groups and in a
location wherein High end automobiles arent ascenario, Auto-Mato is
a start-up that offers a complete store for all the models of the 3
Wheelers as well as a a retail parts store for 3 Wheelers.
Mato-Auto will take care of the Shollinganallur to the Pondichery
route wherein thre is not a single 3 wheeler showroom. Mato-Auto
will have a great opportunity as far as this area is concerned as
this seems to be an area wherein many individuals are capable of
getting a 3 Wheeler especially Kalapettai where agriculture is a
main occupation and people would want to transport the crops which
can be done by small end 3 wheeler goods vehicles.
The showroom will be first opened in Shollinganallur with a rented
space in the beginning after which will be expanded after a period
of 2 years
3. Mission
The mission of Mato-Auto will be to give the customers 3 wheelers
more than just a vehicle as that of being adesirable mix of quality
Automobiles and to create a friendly atmosphere where Mato-Auto
will be known as their 2nd home away from home in terms of the
service they would be getting
4. Company Ownership
Mato-Auto will be completely owned by Mishaal Hamza, who is a
Management graduate from Harvard Business School, USA. He has a 6
year experience with McKinsey & Company in Florida and the last
position held was that of a Procurement Manager
5. Keys to Success
Mato-Autos Keys to success are:
Marketing Services
Recruitment of experienced managerial talent
Raising Sales
Providing excellent services
Customer Satisfaction
A wide range of all the brands available at any point of time
6. Objectives
To become the leading dealer in the 3 Wheeler Industry.
Increase sales to make Mato-Auto a sustainable business.
Significantly increase sales by creating a new market segment of
customers
7. Company Summary
Mato-Auto will be an exclusive outlet for all the brands of 3
wheelers available in the market, wherein customers will have a
look into all the brands and will enable them to make a choice of
their preferred brand of vehicle. Mato-Auto is all about All brands
under one roof.
8. Start Up Summary
The owner of the showroom will put in an amount of Rs 25,80,000 and
the rest will be taken a loan for a 5 year basis which will be
repayed to the bank on time. The property at which this showroom is
located belongs to Mr. Abdul Rahman who is the father in Law of
Mato-Autos owner Mr Mishaal. He has agreed to give away the
showroom which was earlier a furniture showroom for a Rental
agreement of 10 years, each year which would be Rs 5,00,000.
9. Application of funds
Rental Costs
Manpower Costs
Salesman & Professionals: The salaries paid to the salesman and
Professionals would be the best in the market and would not
compromise on it as it will be paid at its best.
Administration Staff: The admin staff or the person in charge of
accounts and taking care of the requirements of vehicles from
dealers have to also be given salary on a monthly basis
Marketing & Promotion costs: These costs will be incurred in
the beginning of its operations in order to create a visibility to
the market.
Development / Infrastructure Costs:These costs include costs
towards Interiors, Furniture and Fittings to make the showroom
attractive.
Maintenance Costs
10. Market Analysis Summary
Indian automobile industry witnessed a growth of 16.04% in
3-wheeler segment. Indian 3-wheeler segment includes a range of
vehicles such as auto rickshaws, mini tempos, etc.In India, there
are 6 local and multinational companies making 3-wheelers. Bajaj
Auto is the leader in 3-wheeler manufacturing. It has also
dominated the global arena after Piaggio.
11. Production
Production During financial year 2005-06, 3-wheeler production
showed a growth of 16.02% over the preceding year. 3-wheelers have
been showing an upward production trend. At present, there are more
than 4.34 lakhs 3 wheelers manufactured in Indian Automobile
Sector
12. Sales in Indian automobile industry
During financial year 2005-06, 3-wheeler sales in Indian market
showed a growth of 17%, with an increase in exports by more than
40%. Sales trend of 3-wheelers in Indian market
13. Chennai Market
From the above statistics we can make out that there is enormous
demand for the 3 wheeler market in India and the same can be
interpretated for the Chennai region as well. Another important
point to be noted is that since Shollinganallurisn't such a highly
developed place and many people who are living here, make their
source of living either by Farming, Drivers etc and this is a great
potential for the 3 wheeler market as these category of people
generally use this kind of vehicle.
14. Market Segmentation
Local residents (People living within a locality of 25 Kms from the
showroom) would be the people who will be targeted and people from
Pondicherry are also expected to come to Mato-Auto as there isnt a
showroom in Pondi with all the Brands under one roof.
15. Strategy and Implementation Summary
Competitive Edge: Mato-Autos competitive edge lies in the vision of
its Owner, who understand better than many of their rivals that a
visit does not just include a customer to but a 3 wheeler, it
includes the entire service experience
Positioning Statement: It is the express purpose of Mato-Auto to
become the local leader in quality and service experience of all
the small Dealerships firms within the Chennai Circle while
maintaining a low cost plan.
16. Marketing Strategies
The company has a modest program of marketing its services that
include the following:
Flyers.
Direct mailers.
Discounts to regular Customers.
Newspaper ads.
Yellow pages.
Referrals through other local businesses.
17. Promotion Strategy
The promotion strategy will take the form of flyers, direct
mailers, price discounts, and advertisements in newspapers and
yellow pages. Mato-Auto will also make its presence felt in Micro
Blogging sites like Twitter. Mato-Auto doesnot desire to spend a
large amount on marketing until the firm is ready to expand either
into new facilities or open up new ones. It is estimated this will
occur sometime after 2 years
18. Pricing Strategy
Mato-Auto exists in a purely competitive environment where each
firm must be a price taker. In other words, the firm has no ability
to affect the market price of its services, regardless of how many
automobiles sells. In this case, therefore, marginal revenue (the
revenue incurred by producing or servicing one more unit) is Just
10% to the price charged. Furthermore, because the demand curve is
essentially horizontal, Mato-Auto can sell automobiles at total
capacity without effecting the price.
19. Sales Forecast
Since the 3 Wheeler industry is, operationally, a sales-shop
environment, it is somewhat difficult to estimate sales.From our
statistics earlier we have come to a consensus that there will be
atleat 2 vehicles sold on a day to day basis and given that 10% is
the margin the manufacturers give for the Dealers, it would mean
that there would be a profit of Rs 10,000 per Vehicle. For the most
part, sales for an automobile dealership are steady year round and
reflect little seasonality.
20. Management Summary
Mishaal worked with McKinsey & Company for 6 years before which
he was associated with TVS Motors as the Sales Manager. Since that
time, he has worked for a variety of projects for TVS in getting
the main project under the TV head of overlooking the sales of 2
Wheelers in Chennai Region and has numerous certificates in
achieving Targets. During the past two years Mr. Mishaal has
attended a PGPM correspondence course on the Sales Module which is
an added advantage
Mishaal had attended IIT Madras where he did his B-Tech in 1990s.
In anticipation of Mato-Autos business needs, Mr. Mishaal is taking
night classes at Symbiosis Academy in marketing.
21. Financial Plan
As said earlier the finance will be taken care of for the initial
investment in the following ways:
The owner Mishaal contributing Rs 25,80,000
Taking a loan from HDFC Bank for Rs 50,00,000 in order to purchase
the stock necessary to run the showroom
Cash Flow projected for the initial year of operations is given
below:
22. Projected Income Statement
23. Summary
Mato-Auto will be a huge busines enterprise at the end of the 3rd
year and it will have a great market to cater to given the rate at
which the market is growing. Since its a showroom having all the
brands under the 3 wheeler category and this will be a huge chance
for the business to develop in a place like
Shollinganallur.
