Group 1

Akmal b. Mohd Noor 0327071

Nahdi Samae 0410297

Mirza Zia Mohiuddin 0523399

Tan Chong Motor Corp.

Internal Analysis

Principal Activities

• Assembly and distribution of passenger and commercial vehicles

• Workshop services include distribution of genuine Nissan’s spare parts.

• Provision of hire purchase (financing) and security (accessories).

• Manufacture fuel tanks and press metal parts.

Products and services

• Sedan Cars, pickup trucks, van and MPV

• Financing service for customers

• Genuine spare parts and auto services

Current Strategy

• New assembly plant in Serendah

• focusing on fuel-efficiency and the size of engine in consideration of its productions

• price its Nissan cars 9% higher or an average price of RM 111,000

Strengths

Tan Chong should naturally benefit from its principals such as

• good reputations• experienced and skilled human capital• competitive valuable alliances with Nissan• high quality products• Market a diversified product

Weakness

• Under-represented in more than 50% of the consumer segments-Class A (Compact car)-Class B (sub-compact sedans)-Class D (mid-size sedan)

• Limited market

• Incompetent forecasting department

NISSAN GT 2012

• Quality – to focus and raise product quality, services, brand and management

• Leader in zero-emissions vehicles – in awareness of environmental issues, Nissan plans to introduce all-electric vehicle in the US and Japan in 2010 and mass-market it by 2012.

• 5% revenue growth on average every year – this is supported by it plans to launch 60 new models by 2012. Two-thirds of the models will be replacement models and the remaining will be new models

Value Chain Analysis

NISSAN

TAN CHONG MOTOR

ASSEMBLY UNIT

TANCHONG MOTOR

DISTRIBTION UNIT

External Analysis

-Number of rivals: • Toyota• Honda• Proton• Perodua

-Number of buyers: 441,678 as of 2007

-Degree of product differentiation: Rivals sell similar products

- Supply and demand conditions: A new plant in Serendah gives Tan Chong the capability making 2400 units a month.

demand has risen especially with the launch of the new Sylphy and Grand Livina.

- Technology : Nissan has made new leaps in the fuel efficient engine technology.

Competitive forces

-Rivals: A well established Proton and PeroduaToyota, currently the leading non-Malaysian car manufacturer in

MalaysiaHonda and Naza, who seem to be losing steam

-New entrants : Cherry’ entered the Malaysian market in

-Buyer bargaining power : low, as Nissan is charging a price 9% higher than those charged a year prior, yet are being purchased like hot cakes

Industry Driving Forces

-Globalization: will increase competition in an already competitive market

-Long term growth rate: is projected to rise as the Malaysian automotive industry is recovering from a slack period.

-Product innovation: Strides in fuel efficient engine technology

-Regulations : National Automotive Plan 2006 Rebates on vehicles with engine size lower than 2000 cc

-Lifestyles and trends: Tan Chong has successfully targeted itself to different lifestyle groups with the product line

- The X-Trail : The adventurer- The Grand Livina : The environment friendly family- The Latio Sport : The “petrol head”- The Latio Sedan : The trendy one-The Frontier : The practical one

Future Outlook

-Growth potential : is high as the automotive industry is recovering from a slack-Current sentiments are more emotional and thus will not last for long

Opportunity:

-The sliding market share of Proton, Perodua, Honda and Naza in the auto industry.

-The market is recovering from a slump which gives Nissan the opportunity to gain ground in the market share.

-Nissan has been a pioneer in developing small, powerful and efficient engines and thus is a bonus to it on two levels. As the government has offered rebates to vehicles with engine sizes below 2000 cc it will reduce cost and also capture customers who want so save the environment.

Threat:

-The increased globalization has threatened Tan Chong with facing new completion.

-The National Automotive Plan puts Tan Chong and Nissan at a disadvantage as it clearly support Malaysian brands over international ones.