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Business plan prepared by Marco Maragliano for June 28, 2007
SOURCES All data are based on the following sources: • • • Automotive Club of Italy (ACI) PRA (Public Automotive Register) Automotive Observatory (Turin) FEDERAICPA – Federal Association Car Concessionaires UNRAE – National Union Foreign Representatives of Car Producers GIPA (International Grouping Automotive Products) Internet searches Audipress Personal contacts
BLOCK ONE SUMMARY We will go through: • • • Socio-economical factors Car population and its features Car park value and his value Main characteristics of diesel park New or Second Hand? Statistics. M. Maragliano for
Socio-demographic changes in Italian Automotive Market – Some considerations (1) In the last 6 years motorists population increased by 6% M. Maragliano for
Socio-demographic changes in Italian Automotive Market – Some considerations (2) This gain is due only to the entry of “new” women at the wheel 2000 2006 Male 59, 2% 57, 0% - 76. 803 Female 48, 8% 43, 0% +1. 284. 332 Total 100% M. Maragliano for
Socio-demographic changes in Italian Automotive Market – Some considerations (3) The range of the youngest motorists progressively decreased. The entry of new licensed 18 -year-old (or a little older) youths has been more limited than the new entries in other age ranges Total Drivers Age 2000 2006 18 -24 years 14, 2 % 10, 1% 25 -34 years 25, 3 % 23, 6% 35 -49 years 28, 7 % 33, 0% 50 -64 years 22, 0 % 22, 9% > 64 years 9, 8% 10, 4% Total 100% 41, 3 years 43, 0 years Average 39, 5% to 33, 7% 60, 5% to 66, 3% M. Maragliano for
Some considerations (4) Profession Driver’s Universe Farmer………………………. . Enterpreneur, Professional man, Manager……. Artisan, Tradesman, Indipendent………………. Salesman, White Collar……………. Employee, teacher………………. . Worker, Blue Collar……………… 0, 7% 7, 1% 3, 1% 21, 8% 21, 0% Pensioner……………………. Housewife……………………. Student………………………. Unemployed……………………. Temporary non employed……………. . 16, 6% 13, 2% 6, 6% 1, 3% 1, 0% Active 61, 4% Non Active 38, 6% M. Maragliano for
Some considerations (5) • • • The percentage of the actives considerably increased The average income of the motorist households increased (+14, 6 %) The percentage of Students and Housewives decreased Drivers Profession 2000 2006 Total actives 54, 6% 61, 4% Total non-Active 45, 4% 38, 6% Total 100% Pensioner 16, 2% 16, 5% Housewife 14, 0% 12, 9% Student 9, 7% 6, 8% Unemployed, non Employed 5, 5% 2, 4% 19. 307 € 22. 131€ Non-Active Distribution Declared annual average income M. Maragliano for
Car population and its features (1) In 6 years a gain of 3, 4 million cars, equivalent to 12, 9 % M. Maragliano for
Car population and its features (2) The highest increase has been recorded in the South and particularly in the Islands, both in absolute and percentage terms North. West North-East Centre South Islands Population by Geographical Area 2000 7. 453. 896 5. 372. 098 5. 495. 594 5. 566. 164 2. 602. 248 2006 7. 528. 444 +74. 548 6. 104. 760 +732. 662 5. 979. 475 +483. 881 6. 611. 591 +1. 045. 427 3. 684. 496 +1. 082. 248 M. Maragliano for
Car population and its features (3) In comparison with 2000, the Population has got older (0, 4 years more) the part of population older than 10 years has become more substantial Year 2000 % Total N° of Cars 100% 24. 490. 000 6, 94 Age Average Car Age 0 – 2 years 5. 063. 202 3 – 4 years Year 2006 16, 9% 14, 5% 4. 334. 007 5 – 6 years 15, 1% 4. 522. 187 7 – 10 years 26, 8% 8. 003. 000 > 10 years 26, 7% 7. 986. 370 Total 100% 29. 908. 788 M. Maragliano for 7, 34
Car population and its features (4) In the last 12 months the annual mileage seems to be stabilized M. Maragliano for
Car park value in € by Age Total Car Park Value: 221 billions € Average: 7. 254 € M. Maragliano for
Car park value in € by Geographical Area Total Car Park Value: 221 billions € Average: 7. 254 € M. Maragliano for
Car Park Value – by Brand M. Maragliano for
Car population and its features (5) The “Road Runners” are: men, middle-age, active. Company cars are driven almost 8. 000 km more than the average Sex Profession Ownership Driver’s Age Average 12. 634 Male Female Active Non. Active Personal Company 18 -24 25 -34 35 -49 50 -64 >65 M. Maragliano for
Car population and its features (6) 2000 26. 490. 000 Total Population 2006 29. 908. 766 Distribution by brand origin 48, 1% Above all the share of German and Asiatic cars is growing Italian 38, 4% 14, 7% French 15, 5% 25, 6% German 29, 1% 6, 1% Asiatic 11, 3% 5, 5% Other 5, 7% 100% M. Maragliano for
Car population and its features (7) The population motorization has considerably changed In 2000 the Diesel Population was made up of 2. 860. 920 Cars, equivalent to 12, 1% In 2006 the Diesel Population is made up of 8. 192. 014 Cars, equivalent to 27, 4% M. Maragliano for
Main characteristics of Diesel Car Park (1) Lower age average compared to gasoline Average: 5, 4 years M. Maragliano for
Main characteristics of Diesel Car Park (2) Annual kilometer average: 17. 337 Km Average km. by car : 75. 327 Km M. Maragliano for
Main characteristics of Diesel Car Park (3) M. Maragliano for
Main characteristics of Car Park (4) North W North E Centre South Islands Park by Geographical area Age average 6, 6 years 7, 2 years 7, 7 years 8, 6 years 7, 8 years Gasoline Average 68, 0% 7, 4 years 71, 0% 8, 1 years 71, 1% 8, 8 years 63, 9% 9, 9 years 67, 2% 9, 0 years Diesel Average 32, 0% 4, 9 years 29, 0% 5, 2 years 28, 9% 5, 0 years 36, 1% 6, 3 years 32, 8% 5, 4 years M. Maragliano for
Main characteristics of Diesel Car Park (5) North W North E Centre South Islands Diesel Gasoline Diesel cars of North-Centre are younger and makes more Km. M. Maragliano for
Second hand car market in Europe Italian Market far below Germany and UK. Room enough to grow? M. Maragliano for
Second hand cars in Europe 2006 In Germany for every new car there almost two second hand sold. In UK the highest % is due mainly of new Company cars ownership. M. Maragliano for
Car import by age Almost 60% of imported cars are less than one year old M. Maragliano for
Car Import by Brand (Top 5) M. Maragliano for
Second Hand vs New Cars. Sales Distribution New Second Hand Second hand car sales substantially increase in Southern Italy M. Maragliano for
Second Hand Sales Distribution Second Hand North W North E Centre South Islands Gasoline 26, 4% 29, 8% 36, 3% 45, 5% 49, 1% Diesel 32, 8% 28, 6% 28, 1% 45, 0% 34, 5% New (for comparaison) Gasoline 73, 6% 70, 2% 63, 7% 54, 5% 50, 9% Diesel 67, 2% 71, 4% 71, 9% 55, 0% 65, 5% M. Maragliano for
New or Second Hand car? % M. Maragliano for
End Block One
ready – Block Two M. Maragliano for
BLOCK TWO SUMMARY We will go through: • Short Gantt • Short Business Plan (Hypothesis, Figures and Projections)
SHORT GANTT Weeks 1 2 3 4 5 6 7 8 9 10 A Consultant Company B Set up Automarketing I. C Italian website D First office location E Office furnitures F Location contract G Search of personnel Choice of Advt Media Selection of personnel J Personnel hiring Start of Advertising Personnel availability 15 L 14 K 13 I 12 H 11 M. Operation start Remark: before start Gantt operations, a training of the Manager is necessary. M. Maragliano for
A The quickest and safe way is to select a consultant company linked with Automarketing (Bayer & Bayer? ) B Ownership must be of AUTOMARKETING Gmbh or AUTOMARKETING S. L. Develops. Notary act in Italy is necessary, as a cash deposit of minimum 10. 000€. There is also a temporary option: to set up a Liaison Office. In this case Italian initial staff will act as liaison to AUTOMARKETING Fr. but it will be necessary to review almost entire Business Plan. C It must be done in strict cooperation with AUTOMARKETING webmaster. Task of the Manager. D The choice of the location will have a remarkable impact on office operational expenses, therefore affecting the economical section of the Business Plan. Joint decision of GM and Italian Manager E Time include selection of furnitures, purchase, delivery. Task of the Manager. F For location contract it will be necessary the presence of AUTOMARKETING General Manager or a proxi to Italian Manager. G Advertising on newspaper necessary. PR activity preparation. H Analysis of various media, internet indexing, final Advertising campaign plan. Task of the Manager. I Considering 6 interviews a day, minimum one week for selection is necessary. Task of the Manager. J Time necessary for legal practices. Task of Consultant Company. K Advertising will start same time of the personnel hiring in order to get as soon as possible potential customers. Enquiries will be handled temporarily by the Manager. Start of PR activity. L Time of physical availability of personnel M As soon as personnel will be available telemarketing can start focused on target categories. M. Maragliano for
SHORT BUSINESS PLAN M. Maragliano for
The structure 1 manager 3 salesmen (1 senior and 2 juniors) 1 administrative 1 secretary Salaries has been roughly calculated (to be reviewed by the Consultant) and kept at low level initially, to have the possibility of revision in case of good performances of the employees. Salesmen salary should include a small commission. The hypothesis is to hire as priority one skilled salesman able to train the other two (younger). As already advanced in Gantt, cost of office may vary substantially in relation to the location. The Revenues are based on a 10% commission on car sales. M. Maragliano for
ADVERTISING Four daily newspapers has been considered as one way of advertising: one issue by week for each of them – in the selected day of largest circulation – should make at medium term a solid ground. To build up the awareness of AUTOMARKETING it could be necessary for one year an advertisement on the one of the largest automotive monthly magazine like “Quattroruote” M. Maragliano for
Redemption Has been calculated on the total of readers and has been considered around 1%. We assume that this 1% may represent the total of the potential customers. Essential for a good redemption is the message we will transfer to the readers: our project is innovative for the Italian market and therefore layout and bodycopy must draw reader’s attention to induce them to make a phone call or send an e-mail. M. Maragliano for
Catches It’s the percentage ( 15%) of redemption, means the real prospective customers that show some interest and that may sign the preliminary contract. M. Maragliano for
Risk Margin (1/5) To be on the safe side, we used the highest possible: it means that Revenues (total people really interested on purchasing the car) has been divided by 5. M. Maragliano for
Considerations on Business Plan This Business Plan doesn’t consider positive factors like: • • Multiple readings for newspapers and magazine Mouth to mouth communication Awareness increase – PR results Sales push strategy like telemarketing and use of some databases – financial promoters, lawyers, private enterpreneurs - already in my hands. M. Maragliano for
First year I supposed to increase of a 20% the monthly car selling like a mathematic progression : 10 cars sold during second month, 12 cars sold the third, 14. 4 cars the fourth… M. Maragliano for
Fixed cost per month. € Office rental 2500 electricity, water 200 telephone, internet 500 computer's amortization 375 furniture amortization 208 salesman 1 800 Salesman 2 800 Salesman 3 800 Total 6183 Salaries Gross salaries+tax Gross+15 th Manager 2000 3922 4902 Administrative 1800 3214 4018 Secretary 1200 2143 2679 Total 11598 Grand Total 17781 M. Maragliano for
Advertising costs Month 4 daily newspapers Quattroruote Others Total Jan 8. 000 16. 000 0 24. 000 Feb 8. 000 16. 000 26. 000 Mar 8. 000 16. 000 3. 000 27. 000 Apr 8. 000 16. 000 4. 000 28. 000 May 8. 000 16. 000 4. 000 28. 000 Jun 8. 000 16. 000 30. 000 Jul 8. 000 16. 000 26. 000 Aug 8. 000 0 0 8. 000 Sep 8. 000 16. 000 4. 000 28. 000 Oct 8. 000 16. 000 26. 000 Nov 8. 000 16. 000 26. 000 Dec 8. 000 16. 000 7. 000 31. 000 Total 96. 000 176. 000 35. 000 308. 000 Average cost 25. 667 month M. Maragliano for
Variable costs Month Advtg Average adv. Salesmen%+ 3000 travelling costs Jan 24. 000 27000 0, 00 2. 500 0, 00 Feb 26. 000 31500 10, 00 2. 500 25. 000, 00 2. 500, 00 Mar 28. 000 34000 12, 00 2. 500 30. 000, 00 3. 000, 00 Apr 28. 000 34500 14, 00 2. 500 35. 000, 00 3. 500, 00 May 28. 000 35320 17, 28 2. 500 43. 200, 00 4. 320, 00 Jun 28. 000 36183 20, 73 2. 500 51. 825, 00 5. 182, 50 Jul 28. 000 37070 24, 28 2. 500 60. 700, 00 6. 070, 00 Aug 8. 000 8000 0, 00 2. 500 0, 00 Sep 26. 000 36450 29, 80 2. 500 74. 500, 00 7. 450, 00 Oct 28. 000 39950 35, 80 2. 500 89. 500, 00 8. 950, 00 Nov 28. 000 41725 42, 90 2. 500 107. 250, 00 10. 725, 00 Dec 28. 000 43875 51, 50 2. 500 128. 750, 00 12. 875, 00 308. 000 405573 258 645. 725, 00 64. 572, 50 Cars sold x month Ave profit margin Revenues 10% salesmen ave. cost per salesmen Monthly 25667 Average variable cost: 33798 22, 00 5. 381, 00 34. 048 M. Maragliano for
Monthly Average Grand Total Advertising average expenses per month 25. 667 Average expenses for travelling 3. 000 Average expenses per salesmen 5. 381 Total variable costs 34. 048 Fixed costs 17. 781 Grand Total 51. 829 M. Maragliano for
Total costs 1 st year Fixed Variable Total Jan 17. 781 27. 000 44. 781 Feb 17. 781 31. 500 49. 281 Mar 17. 781 34. 000 51. 781 Apr 17. 781 34. 500 52. 281 May 17. 781 35. 320 53. 101 Jun 17. 781 36. 183 53. 964 Jul 17. 781 37. 070 54. 851 Aug 17. 781 8. 000 25. 781 Sep 17. 781 36. 450 54. 231 Oct 17. 781 39. 950 57. 731 Nov 17. 781 41. 725 59. 506 Dec 17. 781 43. 875 61. 656 Total 213. 372 405. 573 618. 945 M. Maragliano for
Revenues Average prices for 1 car Hypotetical average profit margin Advertising Redemption Average Break Even Point 25. 000 € 2. 500 € 1% 20, 7 cars x month M. Maragliano for
Redemption and catches (1) La Stampa 1. 457. 000 Il giornale 709. 000 Il Corriere della Sera 2. 577. 000 Il Secolo XIX 527. 000 Redemption 1% Total readers 5. 270. 000 52. 700 Quattroruote 4. 830. 000 48. 300 Total redemption: 101. 000 M. Maragliano for
Penetration rate % We consider the adv campaign as a constant not including multiple readers and awareness increase. The following nubers represents the potential readers coming from a constant situation. Hypothesis: to get 20% average of total potential customers (total redemption) in 5 years Year Penetration rate % 1 8 2 17 3 20 4 25 5 30 Total 100 M. Maragliano for
Penetration rate % M. Maragliano for
Potential active prospects Numbers deriving from penetration rate per year and redemption means : people that are conscious of the existance of the brand- awareness- and do something to get in touch with us Year 1 2 3 Penetration rate 8% 17% 20% Numbers 8. 080 17. 170 20. 200 4 5 25% 30% 25. 250 30. 300 Total redemption 101. 000 M. Maragliano for
Potential active prospects M. Maragliano for
Catches : real purchasing people - % based on Numbers Year Catches 1 1. 212 2 2. 576 3 3. 030 4 3. 788 5 4. 545 Total 15. 150 M. Maragliano for
Catches M. Maragliano for
Risk margin Risk Margin : I decided to divide for 5 times the catches Year catches / 5 Av. Cars per month 1 242, 4 20, 16 2 515, 1 42, 9 3 606 50, 5 4 757, 5 63, 08 5 909 75, 75 Total in 5 years 3. 030 M. Maragliano for
Cars to be sold in 5 years M. Maragliano for
Final figures 1 st Year Hypotetical monthly target selling rate increase of 20% every month- mathematical progression – Number of cars (242) Revenues based on profit margin (2. 500 € ) Total Costs 0 - 44781 Febr 10 25. 000 49281 Mar 12 30. 000 51781 Apr 14 35. 000 52281 17, 28 43. 200 53101 Jun 20, 73 51. 825 53964 Jul 24, 28 60. 700 54851 Ago 0 - 25781 Sept 29, 8 74. 500 54231 35, 8 89. 500 57731 Nov 42, 9 107. 250 59506 Dec 51, 5 128. 750 61656 258, 29 645. 725 618. 949 Jan May Oct M. Maragliano for
Summarized figures (10% profit margin) ROI 1, 043 Ave. Break even point 20, 13 cars M. Maragliano for
Summarized figures (12, 5% profit margin) ROI 1, 271 Ave. Break even point 17, 02 cars M. Maragliano for
Summarized figures (15% profit margin) ROI 1, 487 Ave. Break even point 14, 54 cars M. Maragliano for
Future Years Import Automarketing Penetration on imported cars 2003 133. 641 0% 0% 2004 115. 518 0% 0% 2005 100. 302 0% 0% 2006 101. 964 0% 0% 2007 85. 295 242 0, 28% 2008 74. 270 515 0, 69% 2009 63. 245 606 0, 96% 2010 52. 220 758 1, 45% 2011 41. 196 909 2, 21% Average imported cars 1 year old 2003 – 2006 112. 856 Average imported cars 1 year old 2007 – 20011 63. 245 Average of averages 88. 050 M. Maragliano for
FUTURE : Market share 2007 -2011 Average of averages Average Cars sold by 3 structures in 5 years 88. 050 1. 818 M. Maragliano for
End: Thanks for your time and attention M. Maragliano for
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