The document provides projections for sales, costs of sales, and cash flows for establishing new automobile companies in Japan for Honda, Nissan, and Daihatsu over 5 years from 2015 to 2020. Historical background on each company is also given. Tables show projected annual sales and costs of sales based on historical average growth rates. Cash flow schedules calculate the net present value for each company based on initial investments and projected cash flows discounted at 3% annually.

3. Projection of sales and cost of sales for
establishing new automobile company in
Japan.

4. History of Honda company
• Motorcycle builder Soichiro Honda incorporates the Honda
Motor Company in Hamamatsu, Japan. In the 1960s, the
company achieved worldwide fame for its motorcycles (in
particular, its C100 Super Cub, which became the world’s best-
selling vehicle); in the 1970s, it achieved worldwide fame for
its affordable, fuel-efficient cars. Today, in large part because
of its continued emphasis on affordability, efficiency and eco-
friendliness

6. No of years Sales in yens Annual growth rate Annual growth rate in %
2009 7419582 ((8579174-7419582) /7419582) * 100 15.62%
2010 8579174 ((8936867-8579174) / 8579174) * 100 4.16%
2011 8936867 ((7948095-8936867 ) / 8936867) * 100 -11.06%
2012 7948095 ((9877947-7948095) / 7948095) * 100 24.28%
2013 9877947 ((12506091-9877947) / 9877947 )* 100 26.60%
2014 12506091 13328099-12506091) / 12506091 * 100 6.57%
2015 13328099

7. Average growth rate
15.60+ 4.16+(-11.06)+24.28+26.60+6.57
6
= 11.025 %

8. Projected sales of Honda company
No of years Projected sales Million( yens)
2016 13328099+(13328099 *11.025 %) 14797521.9
2017 14797521.9+(14797521.9* 11.025%) 16428948.6
2018 16428948.6+(16428948.6* 11.025 %) 18240240.1
2019 18240240.19+(18240240.19 * 11.025 %) 20251226.6
2020 20251226.67+(20251226.67 * 11.025%) 22483924.4

9. No of years Cost of Sales in
yens
Annual growth rate Annual growth rate in %
2009 5647712 ((6414721-5647712) /5647712) * 100 13.5%
2010 6414721 ((6496841-6414721) /6414721) * 100 1.28%
2011 6496841 ((5919633-6496841) /6496841) * 100 -8.8%
2012 5919633 ((7345162-5919633/ 5919633) * 100 24%
2013 7345162 ((12506091-9590557) / 9590557 )* 100 30.4%
2014 9590557 ((10330784-9590557 / 9590557* 100 7.7%
2015 10330784

10. Average growth rate
13.5+1.28-8.8+24+30.4+7.7
6
=11.3 %

11. Projected sales of Honda company
No of years Projected sales Million( yens)
2016 10330784+(10330784*11.3%) 11498162.5
2017 11498162.5+(11498162.5* 11.3 %) 12797454.8
2018 12797454.8+(12797454.8* 11.3 %) 14243567.2
2019 14243567.2+(14243567.2* 11.3 %) 15853090.2
2020 15853090.2+(15853090.2* 11.3%) 17644489.4

12. History of Nissan
• In 1934, the Tokyo-based Jidosha-Seizo Kabushiki-Kaisha (Automobile
Manufacturing Co., Ltd. in English) takes on a new name: Nissan Motor
Company.
• Jidosha-Seizo Kabushiki-Kaisha had been established in December 1933.
The company’s new name, adopted in June 1934, was an abbreviation for
Nippon Sangyo, a “zaibatsu” (or holding company) belonging to Tobata’s
founder, Yoshisuke Aikawa. Nissan produced its first Datsun (a descendant
of the Dat Car, a small, boxy passenger vehicle designed by Japanese
automotive pioneer Masujiro Hashimoto that was first produced in 1914)
at its Yokohama plant in April 1935.

14. No of years Sales in yens Annual growth rate Annual growth rate in
%
2009 7517277 (8773093-7517277)/7517277)*100 16.7
2010 8773093 ((9409026-8773093)/8773093)*100 7.24
2011 9409026 ((8737320-9409026)/9409026)*100 7.13
2012 8737320 ((10482520-8737320)/8737320)*100 19.9
2013 10482520 ((11375207-10482520)/10482520)*100 8.5
2014 11375207

15. Average growth rate
16.7+7.24+(-7.13)+19.9+8.5
5
= 11.89 %

16. Projected sales of Nissan
No of years Projected sales Million( yens)
2015 11375207+(11375207*11.89 %) 12727719
2016 12727719+(12727719* 11.089%) 14241044.8
2017 14241044.8+(14241044.8* 11.89 %) 15934305
2018 15934305+(15934305* 11.89 %) 17828893.8
2019 17828893.8+(17828893.8* 11.89%) 19948749.2

17. No of years Cost of Sales in
yens
Annual growth rate Annual growth rate in %
2009 6146219 ((7155100-6146219) /6146219) * 100 16.4%
2010 7155100 ((7772832-7155100) /7155100) * 100 8.6%
2011 7772832 ((7289987-7772832) /7772832) * 100 -6.2%
2012 7289987 ((8636063-7289987/ 7289987) * 100 18.4%
2013 8636063 ((9241341-8636063) /8636063 )* 100 7%
2014 9241341

18. Average growth rate
=16.4+8.6+-6.2+18.4+7
5
= 8.84%

19. Projected cost of sales of Nissan
automobile
No of years Projected sales Million( yens)
2015 9241341+(9241341* 8.84%) 816934.5
2016 816934.5+(816934.5* 8.84%) 889151.5
2017 889151.5+(889151.5* 8.84%) 967752.4
2018 967752.4+(967752.4* 8.84%) 1053301.7
2019 1053301.7+(1053301.7* 8.84%) 1146413.5

20. History of Daihatsu
• Daihatsu appeared one century ago but the brand
name itself was not used on any vehicles till 1951
when the 1907 founded Hatsudoki Seizo company
changed its name to Daihatsu Motor Co. Constructor
of small cars, Daihatsu first released low-priced small
engined three wheelers before launching its range of
four wheelers in 1958. Although Daihatsu car sizes
may spark laughter, they are the result of a cleverly
positioned brand

22. No of years Sales in yens Annual growth rate Annual growth rate in %
2009 1631395 ((1574727-1631395 )/ 1631395* 100 -3.47 %
2010 1574727 ((1559412-1574727) / 1574727 )* 100 -0.97%
2011 1559412 ((1631320-1559412)/ 1559412* 100 4.61%
2012 1631320 ((1764976-1631320) / 1764976* 100 7.57%
2013 1764976 ((1913259-1764976) /1764976 * 100 8.40%
2014 1913259

23. Average growth rate
= -3.47-0.97+4.61+7.57+8.40
5
= 3.22%

24. Projected sales of Daihatsu
No of years Projected sales Million( yens)
2015 1913259+(1913259* 3.22%) 1974865.9
2016 1974865.9+(1974865.9* 3.22%) 2038456.5
2017 2038456.5+(2038456.5* 3.22 %) 2104094.8
2018 2104094.8+(2104094.8* 3.22 %) 2171846.6
2019 2171846.6+(2171846.6* 3.22%) 2241780.0

25. No of years Cost of Sales in
yens
Annual growth rate Annual growth rate in %
2009 1348529 ((1285071-1348529) /1348529) * 100 -4.7%
2010 1285071 ((1217603-1285071) /1285071) * 100 -5.2%
2011 1217603 ((1270034-1217603) /1217603) * 100 4.3%
2012 1270034 ((1367910-1270034/ 1270034) * 100 7.7%
2013 1367910 ((1481630-1367910) /1367910 )* 100 8.3%
2014 1481630

26. Average growth rate
=-4.7-5.2+4.3+7.7+8.3
5
= 5.96%

27. Projected cost of sales of Daihatsu
automobile
No of years Projected sales Million( yens)
2015 1481630+(1481630* 5.96%) 1569935.14
2016 1569935.14+(1569935.14* 5.96%) 1663503.27
2017 1663503.27+(1663503.27* 5.96%) 1762648.0
2018 1762648.0+(1762648.0* 5.96%) 1773153.2
2019 1773153.2+(1773153.2* 5.96%) 1878833.1

28. Cash Flow Schedules:
• Honda
• Nissan
• Daihatsu

29. FORECAST OF INVESTMENT AND CASH FLOW.OF HONDA
Amounts in million yens
Particulars Year 0 Year 1 Year 2 Year 3
Initial investment (1279024)
Cash flows 1247113 1206128 1168914
(1279024) 1247113 1206128 1168914
Exchange rate 0.93 0.93 0.93 0.93
Translation amount 1247113/0.93
1340981.7
1206128/0.93
1296911.8
1168914/0.93
1256896.7
Discount rate .03 % .03% .03 % 0.3 %
Discount factor _ (1 00.03/ 100) =
1.0003
(100.03 / 100)2 =
1.0006
(100.03 / 100)3 =
1.0009
Present value _ 1340981.7/1.0003
=1340579
1296911.8/1.0006
=1296134
1256896.7/1.0009
=1255766

30. • ∑ Present Value = (1340579 + 1296134 + 1255766)
= 3892479
• Net Present Value = ∑ Present Value – Initial Investment
=3892479- 1279024
NPV = 2613455 million yens

31. FORECAST OF INVESTMENT AND CASH FLOW.OF NISSAN
Amounts in million yens
Particulars Year 0 Year 1 Year 2 Year 3
Initial investment (840871)
Cash flows 711901 832716 80612
(840871) 711901 832716 80612
Exchange rate 0.93 0.93 0.93 0.93
Translation amount 711901/0.93
=765484
832716/0.93
=895393
80612/0.93
=86679
Discount rate .03 % .03% .03 % 0.3 %
Discount factor _ (1 00.03/ 100)
=1.0003
(100.03 / 100)2
= 1.0006
(100.03 / 100)3
=1.0009
Present value _ 765484/1.0003
=765254
895393/1.0006
=894856
86679/1.0009
=86601

32. • ∑ Present Value = (765254 +894856 + 86601)
= 1746711
• Net Present Value = ∑ Present Value – Initial Investment
= 1746711- 840871
NPV = 905840 million yens

33. FORECAST OF INVESTMENT AND CASH FLOW.OF NISSAN
amounts in million yens
Particulars Year 0 Year 1 Year 2 Year 3
Initial investment (14232)
Cash flows 64663 145142 102085
(14232) 64663 145142 102085
Exchange rate 0.93 0.93 0.93 0.93
Translation amount 64663/0.93
=69530
145142/0.93
=156066
102085/0.93
=109768
Discount rate .03 % .03% .03 % 0.3 %
Discount factor _ (1 00.03/ 100)
=1.0003
(100.03 / 100)2
= 1.0006
(100.03 / 100)3
=1.0009
Present value _ 69530/1.0003
=69509
156066/1.0006
=155972
109768./1.0009
=109666

34. • ∑ Present Value = (69509 + 155972 + 109666)
=335147
• Net Present Value = ∑ Present Value – Initial Investment
= 335147 -14232
NPV = 320915 million yens