Business Business ReportsReports

• RecommendationRecommendation

• SuggestionSuggestion

• ConclusionConclusion

• InvestigationInvestigation

• ExplanationExplanation

FUNCTIONFUNCTION

GENERAL COMMENTSGENERAL COMMENTS

• Logical sequence

• Accurate data

• Completeness

• Non-emotive language

• Separation of opinion from conclusion

• Brevity and simplicity

BASIC BASIC STRUCTURE STRUCTURE Executive Summary

1. INTRODUCTION

1.1 Purpose

1.2 Background

1.3 Method of Investigation

1.4 Scope

2. FINDINGS

2.1 Heading 1

2.1.1 Sub-heading

2.1.2 Sub-heading

BASIC BASIC STRUCTURE STRUCTURE 2.2 Heading 2

2.2.1 Sub-heading 2.2.2 Sub-heading

3. CONCLUSIONS

4. RECOMMENDATIONS

Bibliography

Appendix

Survey Form

ProceduresProcedures 1. Listing concepts and points

2. Defining your topic

3. Collecting data, and relate reading

4. Designing and doing questionnaires

5. Studying and analyzing

6. Sorting & arranging

7. Drafting and writing

8. Editing

9. Revising

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We Have to Reduce Prices of Passenger Cars in Metropolitan

China

1. Executive SUMMARY

We found that there is a great potential demand in the family car market of China, cars that sell for under RMB 100, 000 yuan each enjoy the greatest popularity, and price is the main factor that directly influences consumer decision to buy.

It is therefore necessary to reduce the price of cars. For this, we recommend that the manufacturing costs be reduced and, step by step, the average price of a family car be lowered to around RMB 50, 000 yuan in five years.

2. INTRODUCTION 1) Purpose This report has been drawn up to look into the

necessity of reducing the prices of cars and to recommend suggestions about how to achieve the price reduction objective.

The purpose of this report is to look into the necessity and possibility of reducing prices in the family automobile industry in China, and to recommend feasible solutions to this proposition.

2) Background We conducted a questionnaire to generate data on

public opinions (see appendices) of owning a family car. We looked into important parameters of Chinese consumers towards owning a car, such as income, housing, and affordability.

Meanwhile, we considered the profitability of the passenger car manufacturing industry.

Middling Company is one of the pioneer car companies in China, which was also one of the first joint venture players in the Chinese market. In 1983, … Ten years later, our first car manufactured in South China ... Moreover, our outputs and earnings in recent years are promising, too. See table 1.

Year Annual

Unit sales earnings *

2007 23000 8.00 billion

2008 33000 8.50 billion

2009 45000 9.20 billion

2010 50000 10.00 billion

However, with China’s entry into the WTO, more international automobile makers are coming to China and the competition is becoming fiercer. Now, the most threatening competitors are Japanese Honda, which now focuses economic family cars, and some Chinese manufacturers. Therefore, it is urgent for us to make some constructive strategies.

3) MethodologyThe information for this report is mainly gathered from 3000

families in Beijing (see appendices) through the distribution and filling of the said questionnaire. Some supporting and background data are from the news media.

Grade Cars Current Price *

High-grade Buick (Shanghai GM) 320,000

High-grade Red Flag 220, 000

High-grade Honda (Guangzhou)

210,000

High-grade Audi 210,000

MiddIe-grade Fukang 140,000

MiddIe-grade Jetta 130, 000

MiddIe-grade Santana 110, 000

Low-grade Xiali 90,000

Low-grade Auto 60, 000

3. 2 Great Market Potential in China

3.2. 1 The Great Profit Margin of Car Industry According to some media, the profit of car industry has

reached billions. In 2006, Jetta earned RMB 12 billion; Buick earned 8 billion RMB; and our Santana earned RMB 40 billion. No other market but Chinese car market can bring to a car company such a big profit. So it is reasonable for us to try to hold this market.

3. 2.2 Large Demand for Economic Family Cars in China

A) Need for cars due to housing in suburbs In many old cities, such as Beijing, Shanghai, Guangzhou

and Tianjin, a lot of apartment buildings are being built in the suburbs. Thousands of people live in these areas, where the transportation is not very convenient. Therefore, for the sake of work, it is necessary for them to buy a car in the near future.

B) Need for economic cars because of low income In our research, 2, 000 of the 3, 000 families express their

desires to own a car. Low income, however, keeps them from doing so. The average income is RMB 4, 000—5, 000 yuan per month and only a few people enjoy high salary. So they can only afford low-priced economic family cars.

4. CONCLUSION The above findings show that there is great sales potential

in Chinese car market and it is necessary for us to lower the prices of cars.

5. RECOMMENDATIONS In view of the current situation regarding price reduction,

the following sug gestions are recommended. 5. 1 The Price Reduction Should Be Conducted

Gradually. The price should be placed under RMB 100, 000 per unit

and, in the future 5 years, the price will be lowered gradually to RMB 50, 000 per unit.

5. 2 A New Production Should Be Built One billion dollars should be invested to build a new

production line because mass production will reduce the cost and so lower the price. About the source of capital, our suggestions are:

a) US$4 billion dollars from the World Bank b) US$6 billion dollars being loans from Bank of China

6. BIBLIOGRAPHY Beijing Evening News Beijing Daily www. chinacar. Online.com

7. APPENDICES: A QUESTIONNAIRE