Cielo the car in trouble

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Cielo the car in trouble

  1. 1. Cielo: A Car In Trouble Group 8: Ashish Daga Pramod Hebballi H.P. Panda Sangeeta Dass Megha Kamparia Wasim Mukkaram 대 우 인 터 내 셔 널
  2. 2. “ STRATEGY WITHOUT TACTICS IS THE SLOWEST ROUTE TO VICTORY. TACTICS WITHOUT STRATEGY IS THE NOISE BEFORE DEFEAT.”
  3. 3. ENTRY OF DAEWOO <ul><li>Heralded as a milestone for the industry </li></ul><ul><li>Challenged Maruti Udyog Ltd </li></ul><ul><li>1 st vehicle launched in 3 versions </li></ul><ul><li>Bookings reached an astonishing no 114000 </li></ul><ul><li>Had plans to become a 100 billion company </li></ul>
  4. 4. Now comes the bad part <ul><li>70000 customers cancelled there booking </li></ul><ul><li>Predicted an annual turnover of 10 billion and 20000 cars but managed 6.05 billion and 9044 cars </li></ul><ul><li>Again in April-Dec 52000 target but 13776 sold </li></ul><ul><li>Feb 1998, 9006 cars were sold again a decline of 41% </li></ul><ul><li>Next year reduced by 50 % </li></ul><ul><li>Recorded a loss of 351.4 million in 6 months as sales also declined to 1.22 billion from 2.7 </li></ul><ul><li>It is not necessary that tried and trusted formula in one country will work in every country </li></ul>
  5. 5. Reasons for their downfall <ul><li>Stiff competition from General Motors and Ford </li></ul><ul><li>Targets set by Daewoo was too high and ambitious </li></ul><ul><li>Daewoo itself was responsible for the mess </li></ul><ul><li>Daewoo is good at making cars but rotten at marketing them </li></ul>
  6. 6. Background of daewoo motors <ul><li>Founded in 1967 in Korea it was a part of Daewoo group </li></ul><ul><li>In 2001 had its operations in 123 countries </li></ul><ul><li>Basically a company whish exported readymade garments to US </li></ul><ul><li>Later diversified into trading, construction, automotive, etc </li></ul><ul><li>Automotive became one the most important ventures </li></ul><ul><li>In 1977 entered into joint venture with General motors but conflicts arouse </li></ul>
  7. 7. <ul><li>In 1991 Daewoo bought out 50% stake in the venture for 50 billion </li></ul><ul><li>Faced tough competition in European and us market it looked to diversify it into eastern Europe, Latin America and Asia </li></ul><ul><li>Took over 50% equity held by Japans' Toyota in DCM-TOYOTA </li></ul><ul><li>Renamed it as Daewoo motors India ltd </li></ul><ul><li>Dcm-Ltd again sold 24% of its stake which increased its stake to 75% in Jan 1997 and 92% in 1998 </li></ul><ul><li>Overseas investment on borrowed funds </li></ul><ul><li>In 2000, co’s labor union refused to accept a restructuring plan for the company </li></ul><ul><li>Daewoo was declared bankrupt </li></ul>
  8. 8. <ul><li>Daewoo is good at making cars, but rotten at marketing them. </li></ul><ul><li>-An Automobile Industry Analyst, 2000 </li></ul>
  9. 9. Cielo
  10. 10. Strengths <ul><li>Size and Market share. </li></ul><ul><li>Quality Products. </li></ul><ul><li>Technology Potential. </li></ul><ul><li>Early movers advantage in India. </li></ul>
  11. 11. MISTAKES <ul><li>Lack of a focused approach and inconsistent policies </li></ul><ul><li>Launching of the car into the Indian market was done in an extremely hurried manner </li></ul><ul><li>High import content </li></ul><ul><li>Lack of proper market survey </li></ul><ul><li>Poor fuel efficiency due to lack of modification in Engine </li></ul>
  12. 12. <ul><li>Did not react to customer complaints </li></ul><ul><li>Tried to tackle this problem through its sales staff but they were also not properly trained </li></ul><ul><li>Daewoo assumed there was demand for cars in mid size segment </li></ul><ul><li>People tried to postpone their need to recession in an economy. </li></ul><ul><li>Focus On Numbers Not On After Sales Services </li></ul>
  13. 13. Promotional activities <ul><li>In 1995 Daewoo came up with Diwali bonanza scheme </li></ul><ul><li>Reduced the finance rates to 14.33% </li></ul><ul><li>Discount of 10% was given </li></ul><ul><li>Test drive scheme in April 1997 </li></ul>
  14. 14. Positioning Error <ul><li>Company Keep on changing the positioning of cielo </li></ul><ul><li>Different positioning </li></ul><ul><ul><ul><ul><li>“ Technology & Aesthetics” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ Premium Family Car” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>“ Value Benefits” </li></ul></ul></ul></ul>
  15. 15. CRITICISM FOR PROMOTING <ul><li>In the free scheme people felt there was something wrong </li></ul><ul><li>Lost its image as a feature-rich, luxury family car </li></ul><ul><li>Questioned by MRTP authorities </li></ul><ul><li>Termed ‘unmemorable and poor’ due to constant changes in the positioning </li></ul>
  16. 16. THE BIGGEST BLUNDER <ul><li>Hefty Price Cut Of Rs 1.5 Lakh </li></ul><ul><li>Launch of the ‘ Valyou ’ campaign </li></ul>
  17. 18. Implications <ul><li>Shock to competitors. </li></ul><ul><li>Loss to credibility of the car. </li></ul><ul><li>Loss of customer’s trust. </li></ul><ul><li>Launch of ‘Val-You’ Campaign. </li></ul>
  18. 19. Where Was Cielo ????? <ul><li>Dumped Without A Funeral Ceremony </li></ul>
  19. 20. Matiz
  20. 21. SHIFTING THE FOCUS <ul><li>Oct 1998- MATIZ was launched . </li></ul><ul><li>23,265 units in april-dec 1999, demand increased by 52.2 to 35,398 units april-dec 2000 </li></ul><ul><li>Further CIELO took a back seat after matiz success globally </li></ul><ul><li>Replaced CIELO GLE and GLX with EXECUTIVE and NEXIA but customers failed to see any difference </li></ul><ul><li>Advertising of CIELO stopped </li></ul><ul><li>MATIZ was going places operating in 114 countries </li></ul><ul><li>Failure in INDIA due to SANTRO </li></ul>
  21. 25. SUGGESTIONS <ul><li>Massive cost cutting exercise </li></ul><ul><li>Reduce the working hours </li></ul><ul><li>Reduce the no of workers </li></ul><ul><li>Increase the use of automation </li></ul><ul><li>Postpone the launch of three new cars due to the losses </li></ul><ul><li>Change the positioning of Cielo once more </li></ul>
  22. 26. Conclusion <ul><li>We believe the chances of its success after </li></ul><ul><li>re-positioning is bleak </li></ul>
  23. 27. Thank You <ul><li>We Are Ready For Questions??? </li></ul>

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