Tiêu đề Case Study - Autofornext Turkey - 10.07.2024.pdf ✅

This document has been prepared exclusively by Profil International and cannot be shared with third parties without the permission of authorized managers. CASE STUDY – Autofornext Turkey As we enter the second quarter of 2024, the “Autofornext Turkey” vehicle manufacturing and distribution company is facing various issues. The Board of Directors of Autofornext Turkey has formed an inter-disciplinary team to analyze the current situation and find solutions regarding the current state of the company. You are a part of the team formed by the Board and The Board expects a group presentation from you that includes the causes of the problems, your solution proposals, and your action plans. The Board expects a presentation from you that includes the causes of the problems, your solution proposals, and your action plans. After an individual working period of 15 minutes, you as a group will have 45 minutes for a group study in order to prepare a presentation. You are expected to delve into the causes of the issues, provide solution proposals, and create action plans with your group. Everyone in the group is expected to share their observations and solutions based on their own skills, experience, and expertise. After completing your group study, you will have 10 minutes to make a group presentation to the Board of Directors. Your presentation should be prepared in Google Slides format. The Board may ask you questions during or at the end of your presentation. Autofornext Turkey, established in 1993 and headquartered in Istanbul, Turkey, has been a pillar in the Turkish automotive industry. Known for its robust range of vehicles, including sedans, SUVs, and commercial vehicles, the company has enjoyed years of success. Autofornext Automotive produces and sells vehicles for PROPHEUS, the 4th largest automobile company in the world, based in United States. The manufacturing plant is located in Bursa city, Turkey. Autofornext Automotive and PROPHEUS are in a JV and the company designation is generally recognized as AUTOFORNEXT / PROPHEUS. The Turkish production plant manufactures SEDAN, SUV and commercial vehicles, but imports spare parts from international markets. At the same time, the Turkey produced vehicles are sold to consumers in the country through Autofornext authorized dealerships. Recent challenges, notably declining profits and significant human resources issues, have put the company's future at risk. This case study will delve into the intricacies of Autofornext’s current situation, offering a detailed analysis of the company's challenges. Company Overview Founding and Growth:  Established: 1993  Headquarters: Istanbul, Turkey  Employees: 3,500  Revenue (2023): $250,000,000  Profit Margin (2023): 4%
This document has been prepared exclusively by Profil International and cannot be shared with third parties without the permission of authorized managers. Product Range:  Sedans  SUVs  Commercial Vehicles  After-Sales Services  Spare Parts (Although the production of this product range is not in Turkey, it is exported and distributed for After Market.) Market Presence:  Domestic Market Share: 15%  International Markets: Europe and the Middle East Operational Structure: Autofornext Automotive operates through a centralized purchasing system, ensuring no single supplier dominates more than 50% of their supply chain. The company’s manufacturing plants is strategically located in Marmara region of Turkey. Dealer Network: Autofornext Automotive has a total of 16 dealers in Turkey, distributed as follows:  Marmara Region: 6 dealers  Central Anatolia Region: 3 dealers  Eastern Anatolia Region: 2 dealers  Mediterranean Region: 2 dealers  Black Sea Region: 1 dealer  Western Anatolia Region: 2 dealers  South Eastern Anatolia Region: No dealers yet Other Offerings:  After-Sales Services: Comprehensive after-sales services including vehicle maintenance, repairs, and customer support.  Spare Parts: A wide range of genuine spare parts to ensure the longevity and performance of vehicles. Current Challenges Profit Decline Despite innovative marketing strategies and an expanded product line, Autofornext Automotive has seen a consistent decline in profits. This has raised alarms within the company, necessitating immediate intervention. Financial Performance:  2023 Revenue: $250,000,000  2023 Profit: $10,000,000 (4% profit margin)  2024 Projected Revenue: $240,000,000  2024 Projected Profit: $6,000,000 (2.5% profit margin)
This document has been prepared exclusively by Profil International and cannot be shared with third parties without the permission of authorized managers. Competitors' Profit Margins Over the Last 5 Years Year Competitor 1: LuxlersAuto (% Profit Margin) Competitor 2: TurkeyTurbo (% Profit Margin) Competitor 3: Internalsuper Motors (% Profit Margin) Competitor 4: Anatolian Motors (% Profit Margin) 2019 10.5% 8.9% 12.4% 9.7% 2020 10.6% 7.4% 12.5% 9.8% 2021 10.7% 7.8% 12.6% 9.9% 2022 10.8% 8.2% 12.7% 10.0% 2023 10.9% 8.7% 12.8% 10.1% Detailed Financial Metrics: Revenue Breakdown by Segment:  Sedans: $100,000,000 (40%)  SUVs: $80,000,000 (32%)  Commercial Vehicles: $70,000,000 (28%) Cost Structure:  Manufacturing Costs: $150,000,000 (60%)  Sales and Marketing: $40,000,000 (16%)  General and Administrative: $30,000,000 (12%)  R&D Expenses: $20,000,000 (8%)  Other Expenses: $10,000,000 (4%) Year Revenue ($) Cost of Goods Sold ($) Gross Profit ($) Gross Profit Margin (%) Net Profit ($) Net Profit Margin (%) 2019 300,000,0 00 160,000,000 140,000,0 00 46.67% 25,000,00 0 8.33% 2020 290,000,0 00 155,000,000 135,000,0 00 46.55% 23,000,00 0 7.93% 2021 280,000,0 00 150,000,000 130,000,0 00 46.43% 20,000,00 0 7.14% 2022 270,000,0 00 150,000,000 120,000,0 00 44.44% 15,000,00 0 5.56% 2023 250,000,0 00 150,000,000 100,000,0 00 40.00% 10,000,00 0 4.00%
This document has been prepared exclusively by Profil International and cannot be shared with third parties without the permission of authorized managers. Factors Contributing to Profit Decline:  Increased Raw Material Costs: Fluctuations in the global prices of steel and aluminum have increased manufacturing costs. For example, the price of steel, a major component in vehicle manufacturing, spiked by 30% over the last year due to supply chain disruptions and tariffs.  Technological Lag: Slow adoption of advanced manufacturing technologies has led to higher production costs compared to competitors. Autofornext's factories are still using older, less efficient equipment, which results in higher maintenance costs and lower production speeds.  Currency Fluctuations: Exchange rate volatility has impacted the cost of imported components and raw materials. The depreciation of the Turkish lira against the dollar has made it more expensive to procure parts from international suppliers. Dealer Financial Performance Autofornext Automotive's dealer network faces significant challenges, particularly in Central Anatolia:  Central Anatolia Region: The profit rate of all dealers decreased by 9%, with three main dealers particularly weak in sales.  Other Regions: Profit rates have varied, with no significant changes reported. Factors Contributing to Dealer Performance Issues:  Economic Downturn: Economic challenges in Central Anatolia have reduced consumer spending on automobiles. The region has been hit hard by agricultural declines, leading to higher unemployment rates and decreased disposable income.  Inadequate Training: Dealers lack proper training in new sales techniques and product knowledge, affecting their ability to close sales. Many sales staff are unfamiliar with the latest features and benefits of Autofornext's new models, leading to lower customer confidence and lost sales opportunities. HR-Related Issues Among Dealers High turnover rates, low employee morale, and challenges in retaining skilled labor have significantly impacted dealer performance, especially in Central Anatolia. Key Dealer HR Metrics:  Central Anatolia Dealers: o Annual Turnover Rate: 25% o Employee Satisfaction Score: 60/100 o Average Tenure: 2 years  Marmara Region Dealers: o Annual Turnover Rate: 18% o Employee Satisfaction Score: 70/100 o Average Tenure: 3 years Factors Contributing to HR Issues:  Skill Gaps: A shortage of skilled labor in the automotive sector has made it difficult to fill key positions. The local technical schools are not producing enough graduates with the necessary skills, forcing dealerships to rely on underqualified staff.  After-Sales Service Staff Shortages: The after-sales service departments are struggling to retain skilled mechanics and service advisors due to better opportunities in competing dealerships and other industries.