The Business Plan

The Business Plan

Rhino Automobile Pvt. Ltd. Prepared by students of KSMCS, Kapadwanj Presented by,

Rhino

Anish Patel Dhaval Patel Ravi Kalyani Ritesh Shah

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Introduction • Rhino Automobiles Pvt Ltd. was incorporated in December 1995 as a proprietor owner Mr. Bharat Bhardwaj. • Rhino’s state-of-the-art manufacturing unit was set up in 1997 at Greater Noida, U.P with an investment of Rs. 450 crore. The green-field project is spread across 150 acres of land (over 6,00,000 sq. m.). • Company standard presently are ISO 9001 for quality management and

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ISO 14001 for environment management

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Contents 1

Industry and Environmental Analysis

2

Description of the Venture

3

Production Plan

4

Marketing Plan

5

Organizational Plan

6

Financial Plan

7

Risk Assessment

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Industry & Environmental Analysis

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Industry Analysis

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Segment of the Indian Automobile Industry Category Economy segment (up to Rs. 2.5 lacs)

Mid-size segment (Rs. 2.75-4 lacs)

Premium Car Segment (Rs.5-10 lacs)

Luxury segment (Above Rs10 lacs).

Features of the segment Price, Fuel Efficiency

Price, Performance

Price, Performance, Diesel option

Status value, performance, Product features

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Strategic Group Analysis Attributes

Cost Leader

Quality Leader

Segment A

Maruti

Maruti

Segment B

Fiat

Hyundai, Telco

Segment C

Maruti

Honda, Hyundai

Segment D

Hyundai , Skoda

Mercedes

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Environmental Analysis • In present Indian market, Bhardwaj stands as a faithful name • Rhino’s technology is always good compared to other automobiles of same range and globally accepted • Now, Indian common man needs an automobile having luxury facilities in economic price • There are many small cars launched and going to be launched in future like tata nano, hundai i20, maruti A star, fiat bravo, maruti splash, ford ikon 2009 and another name as BLISS • This car Bliss use unique technologies and has comparatively lower price and more features as compared to others

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Contd… • Today in market, maruti 800, Zen, wagon R, hundai Santo Xing are having good sales • As next few months are full of festivals in India there will be a huge demand of automobiles • Many other automobiles will be launched together • Also there will be discounts and additional offers given on existing automobiles so to launch a new automobile followed successful sale is a difficult task

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Description of the venture

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• Total Capital available Sources of Capital

Amount (Rs. In Cr.)

- Equity Share Capital

570.00

- Share from existing Company

200.00

- Bank Loan

130.00

- Total Capital Required

900.00

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Cost Sheet: Sources of Capital

Amount (Rs)

- Primary Cost

1,42,000

- Factory Cost

1,96,825

- Cost of Production

2,24,000

- Cost of Sales

2,50,000

- Excise (Rs.2,50,000 * 10%)

25,000

-Profit

30,000

- Sales Price

3,05,000

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Financial Plan/Feasibility

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Capital Structure Equity Share Capital:

Rs.570 Cr.

No. of Share:

2 Cr. Of Rs.10\- each

Price Band:

Rs.250\- to Rs.300\-

Share from existing company:

Bank Loan:

Rs.200 Cr. {utilize for purchasing land for new plant}

Rs.130 Cr. @ 12% interest from ICICI Bank {mortgaged land worth Rs.130 Cr. at Rajkot}

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Fix Assets Particulars

Amount (Rs.)

Land

140 Cr.

Building

20 Cr.

Machinery

267 Cr.

Depreciation Particulars

Building Plant & Machinery

Value of Asset

20 Cr. 267 Cr.

Rate of Depreciation

10% 15%

Amount of Depreciation

2 Cr. 40 Cr.

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Allocation of Fund to various Departments Department Production Department

Fund Allocated (Rs.) 20.00 Cr.

Purchase Department

80.00 Cr.

Finance & Administration Department

27.00 Cr.

Marketing Department

76.33 Cr.

Human Resource Department

68.31 Cr.

Research & Development Department

200.00 Cr.

Total

471.64 Cr.

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Non – Operating Expense • Interest: Total Interest:

130 Cr. x 12% = 15.6 Cr.

Per Unit interest:

15.6 Cr./25000 Units = Rs.6300\-

Interest on Loan:

Rs.6300\- x 25000 Units / 3 = 5.25 Cr.

• Excise Duty: Cost of Sales x 10% = Rs.2,50,000\- x 10% = Rs.25,000\Total Excise = Rs,25,000\- x 25000 units / 3 = Rs.20,83,33,250\-

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Purchase Report

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• Total Goods Requirements: Steel:

2.13 Cr. Kg. {Rs.30/kg}

Tires:

1,25,000 Nos.

Glasses:

1,50,000 Nos.

Fiber and other material required • Storage of goods purchased in warehouse near production unit. • Transportation by personal vehicle of company.

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Production Plan

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Production Department • Total 25000 units will be produced initially.

As we are going to produce 25000 units in 1st year, our business cycle is having four months time lag therefore production of 8333(25000/3) unites will be done in 1st lag. • Utilization of raw material:

- Iron21250000 kg, i.e.1770830 kg/month - Glasses

150000 Nos.

- Engine

25000 units

- Accessories, etc.

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Cont’d… • Direct Material required: Engine:

Rs.60000\-

Iron:

Rs.15000\-

Glasses:

Rs.10000\-

Other material:

Rs.10000\-

Total:

Rs.95000\-

> 8333 units x Rs.95000\- = Rs.79, 16,35,000\-

• Machinery: Total Machinery worth Rs.267\- Cr. will be installed in production department. Machinery will have all necessary equipments with it. Machinery will be purchased from domestic company.

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Marketing Plan

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Contd… • Company’s policy is not just to create an automobile but to make it reach to common man • To follow it BMIL’s always keeps its automobiles updated with latest technologies Quality Quality

Value Value

Customer Customer Satisfaction Satisfaction

Service Service

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Detail of Marketing Plan

Variable Cost: 8333units x Rs.17800\- = Rs.14, 83,27,400\Fix Cost: Advertisement Rs.61.50Cr. Total cost: Advertisement: Variable cost: Total cost:

Rs.61, 50,00,000\Rs.14, 83,27,400\Rs.76, 33,27,400\-

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Cont’d…  Name of Car: BLISS – The Pleasure of life • Survey Report: We have surveyed in Gujarat, Maharastra, Delhi, Kerala, Madhya Pradesh, Rajasthan, Punjab, Bengal, and Andhra Pradesh. Survey was done by Door to door method, Telephonic, Questionnaire and SMS poll. • Target Market: Upper Middle class Reason: Most of the population of India is belonging to upper middle class.

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Cont’d… – Competitors: • Indica V2 • Zen • Alto • Santro • Wagon-R

Marketing: Advertisements by, • Hoardings • T.V. & Theater • Radio station like FM • Window Display • News Paper • Broacher

(For advertisements we are going to appoint the advertisement agency.)

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Cont’d… • Scheme provided to the customers, - Free accessories to first 5000 customers. {Wheel plates, Music System, Border slides} - Free one year Insurance by New India Co.

• After Sales: We offers three free services to customers, (Km or month whichever is first)

1st 1000km or 1 month 2nd 7000km or 3 months 3rd 25000km or 12 months

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• 10 cup holders. With seating for five, that's two drinks each! • The Bliss 1.3-litre motor generates 73kW of power and 127Nm of torque • this tiny 4-cylinder engine is also very efficient, using an average of just 5.8 liters of petrol per 100km • an AUX jack for iPods and MP3 players • tilt and reach adjustable steering wheels

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Contd… • this model comes standard with a 5-speed manual but can be optioned with a 5-speed automatic • larger 16-inch alloy wheel that set off the stylish ground -effects body work

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Engine Specifications

Power: 88kW @ 6600rpm Torque: 145Nm @ 4800rpm Fuel Economy: 6.4L/100km (man) 6.7L/100km (auto) CO2 Output: 151g/km (man) 159g/km (auto) Gearbox: 5-speed manual (optional: 5-speed auto)

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Organizational Plan

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Remuneration to various departments: Job title

Salary/annul

No of employee

Finance Department

2,61,60,000

25

Research & Development Department

2,19,60,000

33

8,8,0,000

13

Purchase Department Production Department

21,09,60,000

1580

Marketing Department

9,57,60,000

325

Human Recourse Department

2,13,60,000

40

38,50,80,000

2016

Total

Other Activities: Bonus & Incentives: Welfare of employees: Training expenses:

Rs.15 Crs. Rs.3 Crs. Rs.5.80 Crs.

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Return:

We are assuming that our business cycle is having four months time lag. Total Yearly Production: 25000 Units Production of 1st lag: 8333 Units (25000/3) Price of 1 Unit: Rs.3,05,000/Return from Sales: 8333units * Rs.3, 05,000/- = Rs.2,54,15,65,000/-.

Re-allocation of Fund: Department

Fund Allocation

Production Department

20 Crs.

Purchase Department

80 Crs.

Finance & Administrative Department

27 Crs.

Marketing Department

15 Crs.

Human resource department

68.31 Crs.

Total

210.31 Crs

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Cont’d… • The fund available with company after allocation to various department: Fund available:

Rs.2,54,15,65,000/-

(less) Fund allocated:

Rs.2,10,31,00,000/-

Net Taxable fund:

Rs.53,84,65,000/-

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Risk Assessment • What we see Risk as Combination of “Threat and Opportunity”. • Traditional Risk Management – Risk those are devoted to Solving Management problem. • Financial Risk Management – Potential loses arising from things such as interest rate, currency fluctuations, commodity price changes.

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How do we Assess Risk • Timely Information • Speed • Experience • Financial & Operational Flexibility • Resources – a) Financial b) Personnel

In our organization ,”Risk mgt.” is splintered with little communication between those who assess the risk & those who make decision based on those risk assessment.

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BLISS The Pleasure of Life…

Thank You !@

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