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FORD VOLKSWAGEN HONDA TOYOTA A BUSINESS CASE ANALYSIS: AUTOMOBILE INDUSTRY

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  • Slide 1
  • FORD VOLKSWAGEN HONDA TOYOTA A BUSINESS CASE ANALYSIS: AUTOMOBILE INDUSTRY
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  • COMPANIES
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  • COMPANY BACKGROUND
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  • FORD
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  • Henry Ford Founder of Ford Motor Company Ford is the 2nd largest family owned company in the world. William Clay Ford, Jr. (great grandson of Henry Ford) is the current CEO. Ford has manufacturing operations worldwide, including in the United States, Canada, Mexico, China, the United Kingdom, Germany, Turkey, Brazil, Argentina, Australia and South Africa. Ford also has a cooperative agreement with Russian automaker GAZ. Type: Publicly Traded Company Industry: Automotive Founded: June 16, 1903 (111 years ago) Headquarters: Dearborn, Michigan, U.S. Employees: 181,000 (2013) Divisions: Ford,Lincoln and Motorcraft Products (Automobiles) Luxury Vehicles Commercial Vehicles Automotive parts Services Automotive finance Vehicle leasing Vehicle service Background
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  • Global Line-Up
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  • Operations Worldwide Source: http://corporate.ford.com/our-company/operations-worldwide
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  • VOLKSWAGEN
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  • The Past May 28 1937 Dec 1945 Series Production The Beetle Peoples Car Designed by Ferdinand Porsche 1938 - 2003
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  • The Present 12 Brands 7 Countries 39,350 vehicles/day 9.73 M vehicles sold in 2013 = 12.8 % world passenger car market share 310 Models Wolfsburg, Germany
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  • Brands
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  • Key Markets Source: http://www.volkswagenag.com/content/vwcorp/info_center/en/publications/2014/05/Factbook2014.bin.html/binarystorageitem/file/Factbook_2014_Englisch.pdf
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  • TOYOTA Vision Statement: To be the most successful and respected car company in America
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  • Timeline 1926 Founder: Kiichiro Toyoda Started as Toyoda Automatic Loom Works 1937 Toyota Motor Co was established Becomes a major supplier of trucks for Imperial Army during WWII Plants were to be destroyed by the Allies if Japan did not conclude the war 1947 Started Passenger Car Production 1958 Sold their first cars to U.S 1959 Introduce their first plan outside Japan in Brazil Follows philosophy to develop and to produce car in the country to be sold.
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  • Timeline (cont.) 1989 Introduce their luxury line Lexus after several years of development 1997 First Hybrid car- Prius was launched in Japan Rest of the world in 2000 2004 Introduced parallel Scion passenger-car line 2014 Sold its 10-Millionth Vehicle in a year cycle, beating GM, VW to claim a top position
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  • Toyota-Today Largest Automaker in the World. Brands: Toyota, Lexus (Premier), Scion (Parallel) Automotive Business: 95% Other Businesses: Real Estates, Marine, Biotech, IT, Telecommunication: 5% Produces about 7 Million cars every year (1 car every 5 seconds) 58 Manufacture plants across 26 countries-6 continents, 220,000+ employers. Rely on technology and cost-cut
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  • HONDA
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  • Based in Tokyo, Japan President - Takanobu Ito Stock Price Ticker: HMC Market Cap 57.20B # of Employees 198,561 (unconsolidated basis) http://world.honda.com/profile/overview/index.html Company Overview
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  • Fun Facts Manufacturer of automobiles, motorcycles, and power equipment Worlds largest motorcycle manufacturer since 1959 Became second-largest Japanese automobile manufacturer in 2001 Eighth largest manufacturer in the world Became involved with artificial intelligence/robotics research in 1986 Ventured into aerospace industry http://en.wikipedia.org/wiki/Honda
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  • 1963 Start of Hondas automobile business 1969 First overseas production of Honda automobiles 1972 Honda Civic is released 1976 Honda Accord is released http://world.honda.com/timeline/auto/ Timeline
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  • 1982 Becomes first Japanese automobile manufacturer to produce in the US 1986 First luxury Japanese automobile brand (Acura) is released in US 1989 Accord becomes best selling car brand in the US 1995 Worldwide automobile production reaches 30 million http://world.honda.com/timeline/auto/ Timeline
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  • 1999 Insight hybrid is released 2003 Worldwide automobile production reaches 50 million 2005 Worldwide sales of Honda hybrids reach 100K 2012 Sales millionth hybrid automobile http://world.honda.com/timeline/auto/ Timeline
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  • BUSINESS ANALYSIS
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  • Net Income Analysis YEAR FORD NET INCOME VOLKSWAGEN NET INCOME HONDA NET INCOME TOYOTA NET INCOME 2004$3,500$867$4,538$10,911 2005$2,000$1,394$5,099$11,744 2006$12,600$2,455$4,981$13,797 2007$2,700$5,650$5,827$16,731 2008$14,700$6,896$1,385-$4,417 2009$2,170$1,271$2,872$2,241 2010$6,560$9,580$6,421$4,907 2011$2,020$21,992$2,603$3,490 2012$5,660$28,130$3,756$9,842 2013$7,150$12,146$5,603$17,794
  • Slide 25
  • Net Income (Descriptive Statistics) Based on the last 10 years of reported Ford Net Income, sample mean for the net income is $5,906 M. The standard deviation for the sample is 4,528 M. With a 95% confidence level, we can conclude that the net income for Ford for the year end or early 2015 will be $5,906 $3,239 M. Based on the last 10 years of reported Volkswagen Net Income, sample mean for the net income is $9,038 M. The standard deviation for the sample is 9,352 M. With a 95% confidence level, we can conclude that the net income for Volkswagen for the year end or early 2015 will be $9,038 $6,690 M. FORD NET INCOME ANALYSISVOLKSWAGEN NET INCOME ANALYSISHONDA NET INCOME ANALYSISTOYOTA NET INCOME ANALYSIS Mean5906Mean9037.945165Mean4308.5Mean8704 Standard Error1432.025139Standard Error2957.472288Standard Error509.8846983Standard Error2220.963 Median4580Median6272.98336Median4759.5Median10376.5 Mode#N/AMode#N/AMode#N/AMode#N/A Standard Deviation4528.461107Standard Deviation9352.348547Standard Deviation1612.396991Standard Deviation7023.302 Sample Variance20506960Sample Variance87466423.35Sample Variance2599824.056Sample Variance49326776 Kurtosis0.220507049Kurtosis0.643594086Kurtosis-0.642066117Kurtosis-0.38405 Skewness1.144018376Skewness1.251047781Skewness-0.568956402Skewness-0.51503 Range12700Range27263.7032Range5036Range22211 Minimum2000Minimum866.5104Minimum1385Minimum-4417 Maximum14700Maximum28130.2136Maximum6421Maximum17794 Sum59060Sum90379.45165Sum43085Sum87040 Count10Count10Count10Count10 Confidence Level(95.0%)3239.46592Confidence Level(95.0%)6690.26712Confidence Level(95.0%)1153.43932Confidence Level(95.0%)5024.168 Based on the last 10 years of reported Honda Net Income, sample mean for the net income is $4,309 M. The standard deviation for the sample is 1,612 M. With a 95% confidence level, we can conclude that the net income for Honda for the year end or early 2015 will be $4,309 $1,153 M. Based on the last 10 years of reported Toyota Net Income, sample mean for the net income is $8,704 M. The standard deviation for the sample is 7,023 M. With a 95% confidence level, we can conclude that the net income for Toyota for the year end or early 2015 will be $8,704 $5,024 M.
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  • Net Income (Box Plot) Ford High outlier took place in 2009 due to the financial crisis having a great impact on Ford Net Income.
  • Slide 27
  • Net Income (Normal Distribution) - Ford Mean: $5,906 Std Dev: $4,528 99.7% of Fords Net Income 3 = $ 5,906 3($ 4,528) -7.678 ($B) 3 19.490 ($B)
  • Slide 28
  • Net Income (Histogram) - Volkswagen BinFrequency 866.51041 9954.4114676 19042.312531 More2 Frequency of reported net income is between $1,271 and $9,580. = $9,038
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  • = $150 $87 Revenues Reported Data YEARFORD REVENUESVOLKSWAGEN REVENUESHONDA REVENUESTOYOTA REVENUES 2004 $171,600.00$110,598.80$80,734.00$172,812.00 2005 $177,100.00$118,589.61$84,623.00$180,050.00 2006 $160,100.00$131,688.39$93,228.00$200,968.00 2007 $172,500.00$149,258.58$116,559.00$256,036.00 2008 $14,498.00$167,414.98$101,205.00$207,537.00 2009 $3,026.00$146,716.93$91,802.00$202,786.00 2010 $7,149.00$168,200.73$107,444.00$228,353.00 2011 $8,681.00$221,790.73$97,820.00$228,716.00 2012 $133,599.00$247,704.27$101,045.00$225,702.00 2013 $146,917.00$261,652.88$115,583.00$250,756.00
  • Slide 30
  • = $150 $87 Revenues - Ford Ford had conducted a restructuring initiative to achieve and maintain profitability by reducing the cost structure which began to pay off 2010. The rise was mainly caused by the return of commercial customers that had all but stopped buying in 2009 during the recession. Sales gains in the U.S. were led by the Ford Fusion sedan, the Ford Taurus and Ford edge, with sales up 51 percent compared to 2009. In 2010 Ford discontinued production of the Mercury brand, in order to fully devote their financial, product development, production and marketing, sales and service resources toward further growing the core Ford brand while enhancing Lincoln.
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  • = $150 $87 Revenues - Volkswagen In 2009, the Volkswagen Group also suffered a decline in revenues due to the global financial crisis with a rebound in 2010 that resulted in earnings that outperformed expectations.
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  • = $150 $87 Revenues - Honda Chart depicts Hondas revenue from F