Market entry strategy

Rishav Kanodia

Puneet ManujaTeam Sedulity

IIM Bangalore

Naveen P Kalro

Rohit Jaiswal

We are Green : Breathe easy, Breathe fresh

SPIRO: Overview

Mission

To impact the lives of millions through sustainable eco-

friendly automotive technology

Vision

To provide world class automobiles that ensure a

pleasurable driving experience while also being light

on the environment in a conscious effort to provide a

clean and green tomorrow to future generations to

come.

Target Segment

The cars manufactured by Spiro motors are

primarily designed to cater to the needs of

customers belonging to the following segments:

Segment 25-40 Years 41-55 Years

City (2)

Medium (1) (1)

Large (1)

*(n) – denotes the number of cars launched in a given segment

Appendix 1 : Details of Car launch timeline and segment

Focus Areas

Hybrid Cars

Lower dependence on volatile prices of fossil fuels

Cleaner Environment

Affordability at competitive prices

City and Medium car segment

High end technology at reasonable prices

Excellent fuel efficiency

Lighter Aluminium body

Energy recovery and storage technology

Financial Projections

Ratio/Year 2011 2012 2013 2014 2015

ROE (3.77) (31.83) 32.97 140.12 95.92

ROA (2.49) (21.05) 21.06 92.25 77.28

Debt/Equity Ratio 52.45 49.90 66.45 41.54 16.19

Profit Margin (12.68) (37.29) 16.92 44.53 42.48

Asset Turnover 19.68 56.47 124.49 207.19 181.95

Leverage 151.15 151.20 156.57 151.88 124.12

Brackets denote negative values

THE SPIROGENS

Rishav Kanodia

(CTO)

Resourceful and Analytical

Puneet Manuja

(CEO)

Dynamic and Inspiring

Naveen P Kalro

(CFO)

Analytical and Quick Witted

Rohit Jaiswal

(Creative lead)

Innovative and Artistic

Executive team, Spiro Motors

Appendix 1: Market Share Estimation

Population of EU : 501,654,162 as of 2010

Based on the 2008 data: 23.5% of the population owns cars i.e. almost 1 in 5 have a car.

Population Age wise: 25-40: 104503253

41-55: 110198867

No of people in these age groups who can buy a car:

25-40 : 23.5% of 104503253= 24558264

41-55 : 23.5% of 110198867= 25896733

Our Target Segment: 11% of the total market in the age group 25-40 buys city cars = 2701409

Appendix 1: Continued

Our Target Segment: 11.5% of the total market in the age group 41-55 buys city cars = 2978124

84% of the people will prefer fuel efficient cars in the future as per the KPMG research.

In 2008, 0.7 % of the car sales was hybrid cars in 2008. Growth rate of hybrid cars= 65% year over year. So, in 2011, the market share of hybrid cars will be = 3.14%

Our Market Share = 10 % of the hybrid car owners in the target age groups

Market Growth Estimations/Assumptions has been provided in Appendix3

Appendix 2: Car launch timeline

CAR Segment Target Age

group

Year of launch Price (in

pounds)

Spiro Micro City 25 – 40 2010 9200

Spiro Mini City/Medium 25 – 40 2010 12400

Spiro Classic Medium 41 – 55 2012 19000

Spiro Dynamic Medium 25 – 40 2013 17500

Spiro Suave Large 41 – 55 2014 26000

Appendix 3:Year on Year Growth

Estimate

Micro Mini Classic Dynamic Suave

YOY growth 2011 over 2010 65% 65% - - -

YOY growth 2012 over 2011 50% 50% - - -

YOY growth 2013 over 2012 35% 35% 65% - -

YOY growth 2014 over 2013 15% 15% 50% 65% -

YOY growth 2015 over 2014 10% 10% 35% 50% 65%

Appendix 4: Assumptions About Costs

Cost(in pounds)

Raw material per car (City) - Micro 1000

Raw material per car (City) - Mini 1700

Raw material per car (Medium) - Classic 1900

Raw material per car (Medium) - Dynamic 1800

Raw material per car (Large) - Suave 3000

RnD Cost per CAR 300,000,000

Factory Cost 650,000,000

Factory Useful Life 6

Markup/Profit 10%

Appendix 5: Different Costs as

percentage of Total Variable Cost

Raw Materials

51%

Warranty5%

Laour10%

Selling & Distribution

25%

Administration9%

Variable Costs

Appendix 6: Annual Sales Forecast

Year/Sales Micro Mini Classic Dynamic Suave

20103,925 3,925 - - -

20116,476 6,476 - - -

20129,714 9,714 8,350 - -

201313,114 13,114 13,778 8,287 -

2014 15,082 15,082 20,666 13,674 4,765

2015 16,590 16,590 27,899 20,510 7,862

Assumption: The factory set up initially has enough infrastructure to sustain production of all cars.