Ford final recommendations indonesia


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  • The Republic of Indonesia consists of five large islands and 13,677 smaller islands (about 6,000 of which are inhabited) forming an arc between Asia and Australia. With a total area of 1,919,440 sq km (741,100 sq mi), Indonesia is the fourth-largest Asian country, after China, India, and Sa'udi Arabia. Comparatively, the area occupied by Indonesia is slightly less than three times the size of the state of Texas. It extends 5,271 km (3,275 mi) E–W and 2,210 km (1,373 mi) N–S. The five principal islands are Sumatra; Java; Borneo, of which the 72% belonging to Indonesia is known as Kalimantan; Sulawesi, formerly called Celebes; and Irian Jaya (West Irian), the western portion of the island of New Guinea. Indonesia has land boundaries with Malaysia (on Borneo), Papua New Guinea (on New Guinea), and East Timor (on Timor). It is bounded on the N by the South China Sea, on the N and E by the Pacific Ocean, and on the S and W by the Indian Ocean. Indonesia's total land boundary length is 2,830 km (1,758 mi). Its coastline is 54, 716 km (33,999 mi).
  • Indonesian foreign direct investment reached US$24 billion in 2012, up 26% from 2011 – a record high.  “There is no way you can run the economy with 7% growth and have this current account deficit of 5%, because it will not be sustainable, so the only way to do it is to encourage foreign investment to come to the country,” “This role of foreign investment becomes very important to ensure the Indonesian economy achieves 7% economic growth in order to create jobs to reduce poverty.”
  • Indonesia is targeting economic expansion of 6.5 percent to 6.8 percent this year after gross domestic product rose 6.1 percent last quarter. The outlook for growth, and interest rates held at a record low 5.75 percent for a 13th straight month have helped drive the benchmark Jakarta Composite Index up 21 percent in the past 12 months.Record low interest rates, a tight job market, and soaring stock prices are boosting consumers’ ability and willingness to spend in Indonesia,” Master of LMC said.Indonesia’s auto market expanded 25 percent last year, compared with 4.2 percent for China,’s according to data compiled by Bloomberg. South Korea’s, where Hyundai gets more than 60 percent of its operating profit, shrank 1.7 percent.“We expect Indonesia to emerge as the largest auto market in Southeast Asia in 2014,” said Thongpak of IHS.The combined population in Southeast Asia is about 650 million people now and Southeast Asia is going to become more interconnected ahead of the planned formation of the 2015 Asean economic committee, Richardson of Samsung Asset said.
  • Cars are mostly bought by Indonesia's affluent class, those with a disposable income above $7,500 a month and who represent 6.6 percent of the country's 240 million people, according to a recent report by the Boston Consulting Group. This figure, says Boston, will reach 16.5 percent in 2020.
  • Without local production, Hyundai probably can’t develop the kind of utilitarian, capacious vehicles craved by Southeast Asian car buyers, “For Indonesia, you need a low-priced, seven-seat multipurpose vehicle
  • Ford final recommendations indonesia

    1. 1. Ford Motor Company Indonesia Entry Strategy Eric Chan Naveen Cheerath Dandan Chen Leslie Forte Lance Kim Wenfeng Tang Renzhong Yu Lele Zheng
    2. 2. 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
    3. 3. Overview on Indonesia
    4. 4. 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:
    5. 5. 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
    6. 6. Indonesia market & GDP -25.00% -15.00% -5.00% 5.00% 15.00% 25.00% 35.00% 45.00% 55.00% 2008 2009 2010 2011 2012 Market growth rate & GDP growth rate Car sales growth rate GDP Annual Growth Rate m634
    7. 7. 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
    8. 8. 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
    9. 9. 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.
    10. 10. Current Ford Lineup
    11. 11. Model Recommendation Explorer Flex Crossover Ranger Escape Lincoln Navigator
    12. 12. Competitor Analysis
    13. 13. 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.
    14. 14. Big Four 15.9% 14.6% 12.1% 1.2%
    15. 15. Favorite Models
    16. 16. • 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
    17. 17. • 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
    18. 18. Marketing
    19. 19. “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
    20. 20. Traditional Marketing • 75% marketing budget spent in traditional media (print, television, etc)
    21. 21. #SocialMedia
    22. 22. Strategy: to humanize the company by connecting consumers with Ford employees and with each other when possible, providing value in the process.
    23. 23. Ford Dealers in Indonesia Sumatra - 9 Papua - 5 Bali - 3 Kalimantan - 6 Java – 28 Sulawesi - 3
    24. 24. Television accounted for more than 60% of ad spending, followed by newspapers (34%) and magazines (3%)
    25. 25. • 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
    26. 26.
    27. 27. 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
    28. 28. 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
    29. 29. Supply Chain
    30. 30. Operation and Supply-Chain 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
    31. 31. Demand ASEAN Operation keeps inventory at dealership at a minimum De ma nd Waitlist is provided for car buyers and depends on the model, wait time ranges from 5 days to 6 months Supply-Chain Thailand’s Hub Manufacturing Supply
    32. 32. Challenges in Supply-Chain Indonesia 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
    33. 33. 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
    34. 34. 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
    35. 35. Verdict
    36. 36. Questions?