Manufacturing a car in Mexico at a 10% profit margin would allow the company to offer an affordable "people's car" in the growing Mexican market. This would generate $185 million in new revenues and $18.5 million in annual profits while positioning the company for future expansion across North and South America. The target market of middle-class Mexican families is large and growing, with a stable economy and trade agreements supporting market access. Producing locally through a sales and production subsidiary would help compete effectively while controlling risks.

1. Why Mexico? Now we can... offer a “peoples car” to Mexico manufacture a car at a 10% profit margin generate revenues of $185 million in new market generate additional net profits of $18.5 million per annum position ourselves strongly for expansion in the Americas

2. Cecile Wong, Sasha Oness, and Myrosha Daley

3. Overview Mexico: The Target Market Environmental Analysis Entry Mode and Rationale Marketing Mix Summary

4. Mexico Democracy since 1997 Pop. 109 million GDP of $1,559 trillion GDP per capita $14,200 Trade Agreements NAFTA EU

5. Target Market Middle Class Families Dual income with kids 10 million Booming Middle Class Rising Wages Growing Purchasing Power Growing GDP per capita Peso on the rise

6. Environmental Analysis Economical Stability Sound economic policy Competition Many players Slow growing market Political Democratic Government Many FTA’s Labour Skilled Cost efficient

7. Porters Five Forces Analysis

8. Competition ChevDesde 93,823 pesos* Toyota Yaris 151,100 pesos Ford Fiesta 123,000 pesos VW Pointer 92,060 pesos Nissan Aprio 101,700 pesos *All prices listed at Mexican market list price. All models listed are base models. Manual transmission and no A/C

9. Entry Mode Internal and External Factors Hierarchal Mode Sales and Production Subsidiaries: Host R & D: Home Marketing: Host Risks & Benefits The Future

10. Marketing Mix: Distribution Unique model: JIT Trial & Order Centres Intensive Market Coverage Reduced inventory costs preserves our competitive advantage! Low Price!

11. Marketing Mix: Promotion Sales Promotion “Tata Lana” Advertising Strong Family Values Passion for Soccer Out Of Home Billboard Direct Megaphone vehicles

12. Marketing Mix Product Tata Poco Adaptation Price Combination Strategy Penetration/Low Cost 49,900 Pesos

13. Summary Attractive Market Strong Competitive Advantage Good Profit Potential Future Growth Unique Distribution Model Future International Expansion USA South America

14. Market and Forecast Current Market = 1 million vehicles Forecasted to drop to 700,000 (WSJ) Our target Yr 1: 25,000 cars, Yr 2: 40,000 cars, Yr 3: 50,000 cars (or 5% market share) Currently sold in India for 28,268 pesos(equiv) If we manufacture for 44,910 pesos 50,000 @ 49,900 pesos = 2495 million pesos Or 185 million US dollars @ 10% profit margin $18.5 million in profits