Beruflich Dokumente
Kultur Dokumente
PRESENTED BY:
MANURAJ KUMAR VATSAL PANT
Agenda.
Case Study Introduction Hyundai Motor Company Chinas Overview Chinese Automotive Industry Hyundai Financial Analysis Case Solution
Case Introduction.
In 2003, Hyundai had an investment of $250 million in China in conjunction with Beijing Automotive to produce 100,000 units per year
Hyundai projects and planned of production to be 200,000 units per year by 2005
Agenda.
Case Study Introduction Hyundai Motor Company Chinas Overview Chinese Automotive Industry Hyundai Financial Analysis Case Solution
Established in 1967 and is presently South Koreas #1 car maker, manufacturing dozens of models of cars, vans, and minivans Throughout the past two decades, Hyundai introduced various models: Pony, Excel, Scoupe, Sonata, and Accent. Acquired a 51% stake in Kia Motors in 1998
Agenda.
Case Study Introduction. Hyundai Motor Company Chinas Overview Chinese Automotive Industry Hyundai Financial Analysis Case Solution
Challenge of dismantling
After 15 years of attempts, China joined the World Trade Organization on September 15, 2001 Over next 5 years, China will remove barriers to entry
Economic Performance
Large increases in per capita income Rise in non-state sector activity Growth in exports and domestic demand
GDP (1980-2007)
12000 10000 8000 6000 4000 2000 0 China Hong Kong Taiwan Japan South Korea
19 80 19 84 19 88 19 92 19 96 20 00 20 04
During 2002, China was the worlds leading recipient of FDI. China has reduced its import tariff on automobiles and auto parts.
Agenda.
Case Study Introduction. Hyundai Motor Company Chinas Overview Chinese Automotive Industry Hyundai Financial Analysis Case Solution
State of undergrowth
Opening up of Chinese Market Implementation of mass production techniques Increase in manufacturing technology
Agenda.
Case Study Introduction. Hyundai Motor Company Chinas Overview Chinese Automotive Industry Hyundai Financial Analysis Case Solution
Hyundai agreed to pay $250 million in a joint venture with Beijing Automotive.
Starting at 100,000 units in 2003, plans to expand to 200,000 units by 2005. If the production is a success, Hyundai invested $1.1 billion to increase productivity to 500,000 by 2010.
Invoice prices of the Sonata & Elantra are global prices Hyundais historic profit margin per car of 20%. 50% of revenue would go to Beijing Automotive
Production
Starting at 100,000 units, production reached 50,000 till 2005 ultimately producing 200,000 units From 2005 to 2010, production increased 60,000 units per year
Revenue: In Millions Elantra @ $ 11,274.00 $ 563,700 $ 845,550 $ 1,127,400 $ 1,465,620 $1,803,840 $2,142,060 $2,480,280 $2,818,500 Sonata @ $ 13,822.00 $ 691,100 $ 1,036,650 $ 1,382,200 $ 1,796,860 $2,211,520 $2,626,180 $3,040,840 $3,455,500 Cost: Elantra @ $ 9,019.20 $ Sonata @ $ 11,057.60 $ Profit: Elantra: Sonata: Total: Hyundai's Share 50% Share of Profits: Cost of capital: NPV: Investments: Cashflows: PV of Plant: NPV
450,960 $ 676,440 $ 901,920 $ 1,172,496 $1,443,072 $1,713,648 $1,984,224 $2,254,800 552,880 $ 829,320 $ 1,105,760 $ 1,437,488 $1,769,216 $2,100,944 $2,432,672 $2,764,400
$ $ $
112,740 $ 169,110 $ 225,480 $ 293,124 $ 360,768 $ 428,412 $ 496,056 $ 563,700 138,220 $ 207,330 $ 276,440 $ 359,372 $ 442,304 $ 525,236 $ 608,168 $ 691,100 250,960 $ 376,440 $ 501,920 $ 652,496 $ 803,072 $ 953,648 $1,104,224 $1,254,800
13.71% In Millions ($250,000) ($1,100,000) $ 125,480 $ 188,220 $ 250,960 $ 326,248 $ 401,536 $ 476,824 $ 552,112 $ 627,400 $ 110,351 $ 145,569 $ 170,690 $ 195,143 $ 211,218 $ 220,580 $ 224,614 $ 224,468 $152,633.45 POSITIVE!!!!
Project Outlook
In order to be successful:
Must form synergies on all levels with China and Beijing Automotive Hyundai must use their experience in investing in 4 other plants in China Take advantage of the first mover opportunity in Chinas deregulated auto market
Relevance
Great opportunity for Hyundais business development Tremendous global growth potential
Bottom line: There is lots of money to be discovered and made in the emerging markets of Korea and China!!!
Thank You.