KIA Concession

Adrien RAKOTONDRAINIBE – Nadia GHEZLANE - Maxime BERTRAND – Benedicte CONTE – Theo FIGUEROA

6 Rue des PeupliersZA du Petit Nanterre92000 / NANTERREFrance

21 Rue Ampere78100 / St GERMAIN EN LAYEFrance

CORPORATE TAKEOVER

Presentation of the Company

The Group

• Kia Motors Corporation is headquartered in Seoul• The South Korea's second-largest automobile manufacturer. Following

the Hyundai Motor Company• Sales of over 2.7 million vehicles in 2012 and almost 2.75 million

vehicles in 2013• As of December 2013, the company is 33.88% owned by the Hyundai

Motor Company.

• Concerning the case we are going to take an interest in AMDS92 society based in Nanterre 92.

• Hyundai Kia Group is now the fourth largest car company in the world• Slogan: the power to surprise• Young automotive brand• Using a competitive pricing strategy• Positive perceptions of its products through high profile sponsorship

deals.• Image: manufacturer of cars of great quality and design. To do this it

has harnessed the power of sports marketing to influence consumers’ perceptions.

The Concession

• The company is an exclusive car concession Kia and dedicated to the sell of brand new Kia’s engines, second hand Kia’s engine and every types of after sales services as well. The company is also authorised repairer MG Rover.

• The company is located in two different sites, one is in Nanterre and the other nearby Saint Germain en Laye.

Which kind of trouble did this company get into ? • Since the 10th of October 2013 this company is subjected to a receivership taken care

by the commercial court of Nanterre.• By the way we are going to build up a recovery plan in order to respond to the call for

tender.

Benchmarking

• Kia is part of the Hyundai Kia Automotive Group • Regarding where the Kia is, we decided to concentrate on brands which are close to Kia.AudiVauban Automobile (Peugeot)Alliance RenaultRG Automotive (all brands)Porsche (But Porsche has not the same range of product)

• With two high level brands such as Porsche and Audi, we can say that our store may rise his standards.

We will analyse ranges, adaptations, stocks rotations, the consumer service, employees

Ranges AdaptationsSales figure

Stocks rotations Consumer service Employees

Audi (Global) 14 models:A1; A3; A4; A5; A6; A7; A8; Q3; Q5; Q7; TT; R8; RS; e-tron.

52 412 employees

Vauban Automobilehttp://www.verif.com/bilans-gratuits/VAUBAN-AUTOMOBILE-609800495/http://www.societe.com/bilan/vauban-automobile-609800495201312311.html

3 models: Peugeot, Renault, Ford.

128 270 562€ Stocks:16 216 400€

By Phone, Internet 268 employees

Alliance RenaultRemplacer par BMW Vélizyhttp://www.verif.com/bilans-gratuits/BMW-DISTRIBUTION-443860101/ http://www.societe.com/societe/bmw-distribution-443860101.html

11 models:Serie 1; 2; 3; 4; 5; 6; 7; X; Z4; M; BMWi;

6 741 447€ 25 employees

RG Automotivehttp://www.societe.com/societe/rg-automotive-534784525.htmlhttp://www.societe.com/societe/rg-automotive-534784525.html

PorschePorsche Distribution Vélizy:

7 models: Boxster; Cayman; 911; 918 Spyder; Panamera; Macan; Cayenne.

74 084 978€ 110 employees

Marketing Analysis

Vision and mission

• Group’s Vision: “Together for a better future”The Hyundai Motor Group aims to create ultimate value and promote harmonious growth for all stakeholders through eco- friendly management and respect for mankind• Automotive Vision: “Lifetime partner in automobiles and beyond”To become a trusted lifetime partner of our customers, we will bring a new perspective to automobiles through innovative mobility solutions based on human-centric, eco-friendly technologies and service

Core Values

• Customer: Promote a custmer driven culture by providing the best quality servicewith all values focused on customers• Challenge:Embrace every opportunity for greater challenge, Confident in achieving goals with ingenious thinking• People: Believe in capabilities of individual members, Kia helps them to develop their potential theur talent in a corporate culture of respect.

Positionning

Marketing Mix

• PRODUCTGood design and quality alongside a high level of customer service, Kia’s unique selling point is its 7-year warranty. Design, Technology, Value, Usefulness, Quality, Accessories• PLACEWith 166 dealerships there is a large and expanding number of outletsRetail shops, Wholesale, Mail order, Direct sales, Multi channel• PRICECompetitive prices provide an advantage over competitors. Strategies, Penetration, Skimming, Cost plus• PROMOTIONThis includes a new sponsorship in cricket and long-term partnerships in football and tennis.Special offers, Advertising, Endorsement, Direct mails, Sport sponsor

SWOT AnalysisSTRENGTHS WEAKNESSES

• One of South Korea’s largest Automobile producer• Among the top 5 Largest Automobile manufacturer

based on its sales• It has strong presence due to its sponsorship to

events like the formula 1, Euro Cup, Australian Open, FIFA World Cup, X-Games in US

• Around 42 000 employees • Good product portfolio and strong brand presence• Has sales of nearly 1,5 million car per year

• Past recall of critical components like the braking system was a concern

• Has not leveraged its presence & recognition globally even as it has created so many sponsorships

• Has not expanded aggressively in terms of the geographic reach

OPPORTUNITIES THREATS • Venture into emerging economies which a huge

market• It can also enter various where Hyundai is present to

fill up gaps in the product offering which Hyundai cannot

• Enter the defence market in the newly liberalized countries of the Jasmine Revolution since it already is existing in the Defence sector

• Their all electric vehicles like the Venga & Pop City can open new avenues of business for KIA

• The Japanese players have made their presence in most of the markets around the World and secured steady market shares

• The competitors have better design and technology thus having better differentiation like Toyota, Honda and Nissan which are the real competitors of KIA

Financial Analysis

Net results Analysis

Why does the activity is losing its rentability and net results is negative in 2010?

2009 2010

Actif

2009 2010

Customer financial debt increases from 230 000€ to 750 000€

2010 2009

Finiancial debt increase by 500 000€ between 2009 and 2010

Passif

2010 2009

Equity is declining, it goes from 178 000€ to 47 600€

Moreover, others debts increased by 66 000€

Compte de resultats2010 2009

Current pre –tax profit is negative contrary to the previous year, and despite production costs are increasing, the added value didn’t move.

Net results in 2010 is negative, it goes from 98 000€ to -130 700€.

Business plan

Current situation

• We are based in Saint Germain en Laye, population has been decreasing since 2006.

Less inhabitant it’s less potantial customers.

The city’s situation:

• 49% married couples, 37% singles.

• 31% senior executives, 21% middle ranges, 19% clerks

• 53% between 25 to 65 years old

• The average annual income is 55 140€ (SPC+)

According to drimki

Balance Sheet Analysis of AMDS92

There is a problem here. The total I is below the half of the Capital, this is not supposed to happen and it reveal a dysfunction in the management of shares. According to the law, the shareholders have 6 months to find a solution after the end of the fiscal year to make a decision, this situation can no longer be. The solution would be to transfer a part of this deficit to the shareholders. There are 3838 shares.Capital = 247 012 €To invest, we have to purchase shares or increase the capital. The increase of the capital seems to be more likely.

Assumption

If we increase the capital, create shares of a value of 60 (2417 012/3838). We invest for instance 200 000 €

(200 000/60 = 3333 shares)

The value of shares after the increases of K = 195 362 / (3333+3838) = 27.24 € (purchased 60€)

If we play an accordion trick we put the increased capital in condition. We transfer half of the losses to the capital which will be paid by the shareholders. (thanks to the law). That way we get half of the losses transferred.

Losses = 263 807 €

½ losses = 131 904 €

Decreases the capital of 131 904

After playing the accordion, the shareholder's equities will be of -4698 €

This being said, we also have to decrease the number of shares because the capital is decreasing.

We would have to get rid of 2198 shares (131 604 / 60)

Recommendations

We need to reduce time of payment to 30 days to get back cash because it increased from 230 000 to 750 000€ – but being careful if the firm starts a marketing campaign with a loan, on how many months. It’s important to find cash, to pay the debts (+66 000€).

We need to propose in priority middle range products because there is a lot of family, with kids, they need space in the car and a reliable one. Also a high range because of competitors (audi or porsche) and the 37% of singles which will not necessary want a 5 doors’ car but something more sporty like the PRO_CEE’D GT ; or the Picanto (more for women).

Some of the employees might be paid less – commercial team, maybe playing about a fix salary and to work on commission. Also we don’t need two “receptionnaires” in Saint Germain. It would be too expansive to fire one of them , but maybe discussing about retirement (enter date 02/10/1989, more than 25 years in the company).

Marketing recommendations:

The challenge for Kia has been to increase awareness of its brand within European markets Kia has to develop its brand identity Improve the communication To give a better brand image: Most of the time people do not think positive things about KIA To set up partnership abroad with good automakers To align compared to its competitors: Toyota, Honda, Nissan which are the most important Improve the quality of the cars: In some cars the wheel vibrates which is dangerous, moreover there is a lot

of breakdowns The After sales service is not good, there is too much complaints To improve the Customer service: Too much waiting To simplify the web site with less tabs

Other recommendations:

The distributor propose rentals and lising so payment are over several months, Kia should demand payment at time

Normally, it’s BtoC, so they cash the client and send back money to KIA but sometimes they forgot . The company should be paid first before sending products.

Concerning the distributor based in Nanterre: 2 salesman are paid over 7000€ 1 saleman should be sufficient and company can drop salary Catch up with late tresurery of 5 days Decrease average duration of suppliers credit ( 61days to 30

days) Reduce global debt (98 days is too much)

Planning of Gantt

jan feb mar apr may jun jul aug sept oct nov dec

Get back cash

Dealing with

retirementConvocation procédure départ

New cars Before summer for families and singles