Mato
Auto
Business
Plan
Mishaal Hamza
Executive Summary
Opening up exclusively for the lower income groups and in a
location wherein High end automobiles arent a scenario,
Auto-Mato is a start-up that offers a complete store for all
the models of the 3 Wheelers as well as a a retail parts store
for 3 Wheelers. Mato-Auto will take care of the
Shollinganallur to the Pondichery route wherein thre is not a
single 3 wheeler showroom. Mato-Auto will have a great
opportunity as far as this area is concerned as this seems to
be an area wherein many individuals are capable of getting a
3 Wheeler especially Kalapettai where agriculture is a main
occupation and people would want to transport the crops
which can be done by small end 3 wheeler goods vehicles.
The showroom will be first opened in Shollinganallur with a
rented space in the beginning after which will be expanded
after a period of 2 years
Mission
The mission of Mato-Auto will be to
give the customers 3 wheelers
more than just a vehicle as that of
being a desirable mix of quality
Automobiles and to create a
friendly atmosphere where MatoAuto will be known as their 2nd
home away from home in terms of
the service they would be getting
Company Ownership
Mato-Auto will be completely
owned by Mishaal Hamza, who is a
Management graduate from
Harvard Business School, USA. He
has a 6 year experience with
McKinsey & Company in Florida
and the last position held was that
of a Procurement Manager
Keys to Success
Mato-Autos Keys to success are:
Marketing Services
Recruitment of experienced managerial
talent
Raising Sales
Providing excellent services
Customer Satisfaction
A wide range of all the brands available at
any point of time
Objectives
To become the leading dealer in
the 3 Wheeler Industry.
Increase sales to make Mato-Auto
a sustainable business.
Significantly increase sales by
creating a new market segment of
customers
Company Summary
Mato-Auto will be an exclusive
outlet for all the brands of 3
wheelers available in the market,
wherein customers will have a look
into all the brands and will enable
them to make a choice of their
preferred brand of vehicle. MatoAuto is all about All brands under
one roof.
Start Up Summary
The owner of the showroom will put in
an amount of Rs 25,80,000 and the rest
will be taken a loan for a 5 year basis
which will be repayed to the bank on
time. The property at which this
showroom is located belongs to Mr.
Abdul Rahman who is the father in Law
of Mato-Autos owner Mr Mishaal. He has
agreed to give away the showroom
which was earlier a furniture showroom
for a Rental agreement of 10 years, each
Application of funds
Rental Costs
Manpower Costs
Salesman & Professionals: The salaries paid to the salesman
and Professionals would be the best in the market and would
not compromise on it as it will be paid at its best.
Administration Staff: The admin staff or the person in charge of
accounts and taking care of the requirements of vehicles from
dealers have to also be given salary on a monthly basis
Marketing & Promotion costs: These costs will be incurred in the
beginning of its operations in order to create a visibility to the
market.
Development / Infrastructure Costs: These costs include costs
towards Interiors, Furniture and Fittings to make the showroom
attractive.
Maintenance Costs
Market Analysis Summary
Indian automobile industry witnessed a
growth of 16.04% in 3-wheeler segment.
Indian 3-wheeler segment includes a range of
vehicles such as auto rickshaws, mini tempos,
etc.
In India, there are 6 local and multinational
companies making 3-wheelers. Bajaj Auto is
the leader in 3-wheeler manufacturing. It has
also dominated the global arena after Piaggio.
Production
Production
During financial year 2005-06, 3-wheeler
production showed a growth of 16.02%
over the preceding year. 3-wheelers have
been showing an upward production trend.
At present, there are more than 4.34 lakhs
3 wheelers manufactured in Indian
Automobile Sector
Sales in Indian automobile
industry
During financial year 2005-06, 3-wheeler
sales in Indian market showed a growth of
17%, with an increase in exports by more
than 40%.
Sales trend of 3-wheelers in Indian market
Chennai Market
From the above statistics we can make out that
there is enormous demand for the 3 wheeler
market in India and the same can be
interpretated for the Chennai region as well.
Another important point to be noted is that
since Shollinganallur isn't such a highly
developed place and many people who are
living here, make their source of living either by
Farming, Drivers etc and this is a great potential
for the 3 wheeler market as these category of
people generally use this kind of vehicle.
Market Segmentation
Local residents (People living
within a locality of 25 Kms from the
showroom) would be the people
who will be targeted and people
from Pondicherry are also expected
to come to Mato-Auto as there isnt
a showroom in Pondi with all the
Brands under one roof.
Strategy and Implementation
Summary
Competitive Edge: Mato-Autos competitive
edge lies in the vision of its Owner, who
understand better than many of their rivals that
a visit does not just include a customer to but a
3 wheeler, it includes the entire service
experience
Positioning Statement: It is the express
purpose of Mato-Auto to become the local
leader in quality and service experience of all
the small Dealerships firms within the Chennai
Circle while maintaining a low cost plan.
Marketing Strategies
The company has a modest program of
marketing its services that include the
following:
Flyers.
Direct mailers.
Discounts to regular Customers.
Newspaper ads.
Yellow pages.
Referrals through other local businesses.
Promotion Strategy
The promotion strategy will take the form of
flyers, direct mailers, price discounts, and
advertisements in newspapers and yellow
pages. Mato-Auto will also make its
presence felt in Micro Blogging sites like
Twitter. Mato-Auto doesnot desire to spend
a large amount on marketing until the firm
is ready to expand either into new facilities
or open up new ones. It is estimated this will
occur sometime after 2 years
Pricing Strategy
Mato-Auto exists in a purely competitive
environment where each firm must be a price
taker. In other words, the firm has no ability to
affect the market price of its services,
regardless of how many automobiles sells. In
this case, therefore, marginal revenue (the
revenue incurred by producing or servicing one
more unit) is Just 10% to the price charged.
Furthermore, because the demand curve is
essentially horizontal, Mato-Auto can sell
automobiles at total capacity without effecting
the price.
Sales Forecast
Since the 3 Wheeler industry is,
operationally, a sales-shop environment,
it is somewhat difficult to estimate
[Link] our statistics earlier we have
come to a consensus that there will be
atleat 2 vehicles sold on a day to day
basis and given that 10% is the margin
the manufacturers give for the Dealers,
it would mean that there would be a
profit of Rs 10,000 per Vehicle. For the
most part, sales for an automobile
Management Summary
Mishaal worked with McKinsey & Company for 6 years
before which he was associated with TVS Motors as the
Sales Manager. Since that time, he has worked for a
variety of projects for TVS in getting the main project
under the TV head of overlooking the sales of 2 Wheelers
in Chennai Region and has numerous certificates in
achieving Targets. During the past two years Mr. Mishaal
has attended a PGPM correspondence course on the Sales
Module which is an added advantage
Mishaal had attended IIT Madras where he did his B-Tech
in 1990s. In anticipation of Mato-Autos business needs,
Mr. Mishaal is taking night classes at Symbiosis Academy
in marketing.
Financial Plan
As said earlier the finance will be taken care
of for the initial investment in the following
ways:
The owner Mishaal contributing Rs 25,80,000
Taking a loan from HDFC Bank for Rs
50,00,000 in order to purchase the stock
necessary to run the showroom
Cash Flow projected for the initial year of
operations is given below:
Projected Income Statement
Year1
Year2
Year3
Sales
Direct Cost of
Sales
Gross Margin
7,00,00,000
6,30,00,000
7,40,00,000
6,66,00,000
8,20,00,000
7,38,00,000
70,00,000
74,00,000
82,00,000
Gross Margin
70,00,000
74,00,000
82,00,000
Gross Margin
70,00,000
74,00,000
8,20,000
Marketing Exp
Rent
Utilities
Insurance
Personnel
Electricity
Total Operating
Plan
2,00,000
5,00,000
1,50,000
50,000
7,20,000
1,20,000
17,40,000
5,50,000
2,00,000
55,000
7,50,000
1,30,000
16,85,000
5,50,000
1,80,000
60,000
8,00,000
1,20,000
17,10,000
Summary
Mato-Auto will be a huge busines
enterprise at the end of the 3rd year
and it will have a great market to
cater to given the rate at which the
market is growing. Since its a
showroom having all the brands
under the 3 wheeler category and
this will be a huge chance for the
business to develop in a place like
Shollinganallur.
