The Business Plan

Rhino Automobile
Pvt. Ltd.
Prepared by students of
KSMCS, Kapadwanj
Presented by,
Anish Patel
Dhaval Patel
Ravi Kalyani
Rhino !@
Ritesh Shah#
Introduction

• Rhino Automobiles Pvt Ltd. was incorporated in December 1995 as a

proprietor owner Mr. Bharat Bhardwaj.
• Rhino’s state-of-the-art manufacturing unit was set up in 1997 at Greater
Noida, U.P with an investment of Rs. 450 crore. The green-field project is
spread across 150 acres of land (over 6,00,000 sq. m.).
• Company standard presently are ISO 9001 for quality management and
ISO 14001 for environment management .

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Contents
1 Industry and Environmental Analysis

2 Description of the Venture

3 Production Plan

4 Marketing Plan

5 Organizational Plan

6 Financial Plan

7 Risk Assessment

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Industry & Environmental Analysis

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Industry Analysis

I n d i a n A u t o m o b i l

T h r e eM W u l ht C i e oUe lm t e i Prml is a t e y s r s Tc e i wn a g l o e r W h e
V e h i V c l e e h s i cC l ae r s s

M o t o S r c Co o My t c e o l r e p s
P a s s eG n o g o e d r s
C a r rC i ea r r s r i e r s

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Segment of the Indian Automobile Industry

Category Features of the segment

Economy segment (up to Rs. 2.5 lacs)

Price, Fuel Efficiency

Mid-size segment (Rs. 2.75-4 lacs)

Price, Performance

Premium Car Segment (Rs.5-10 lacs)

Price, Performance, Diesel option

Luxury segment (Above Rs10 lacs).

Status value, performance, Product features

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Strategic Group Analysis

Attributes Cost Leader Quality Leader

Segment A Maruti Maruti

Segment B Fiat Hyundai, Telco

Segment C Maruti Honda, Hyundai

Segment D Hyundai , Skoda Mercedes

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Environmental Analysis

• In present Indian market, Bhardwaj stands as a faithful name

• Rhino’s technology is always good compared to other automobiles of same range and
globally accepted

• Now, Indian common man needs an automobile having luxury facilities in economic price

• There are many small cars launched and going to be launched in future like tata nano,
hundai i20, maruti A star, fiat bravo, maruti splash, ford ikon 2009 and another name as
BLISS

• This car Bliss use unique technologies and has comparatively lower price and more
features as compared to others

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Contd…

• Today in market, maruti 800, Zen, wagon R, hundai Santo Xing are
having good sales
• As next few months are full of festivals in India there will be a huge
demand of automobiles
• Many other automobiles will be launched together
• Also there will be discounts and additional offers given on existing
automobiles so to launch a new automobile followed successful sale is a
difficult task

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Description of the venture

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• Total Capital available

Sources of Capital Amount (Rs. In Cr.)

- Equity Share Capital 570.00

- Share from existing Company 200.00

- Bank Loan 130.00

- Total Capital Required 900.00

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Cost Sheet:

Sources of Capital Amount (Rs)

- Primary Cost 1,42,000

- Factory Cost 1,96,825

- Cost of Production 2,24,000

- Cost of Sales 2,50,000

- Excise (Rs.2,50,000 * 10%) 25,000

-Profit 30,000

- Sales Price 3,05,000

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Financial Plan/Feasibility

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Capital Structure

Equity Share Capital: Rs.570 Cr.

No. of Share: 2 Cr. Of Rs.10\- each
Price Band: Rs.250\- to Rs.300\-

Share from existing company: Rs.200 Cr. {utilize for purchasing land for
new plant}

Bank Loan: Rs.130 Cr. @ 12% interest from ICICI Bank

{mortgaged land worth Rs.130 Cr. at Rajkot}

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Fix Assets
Particulars Amount (Rs.)
Land 140 Cr.
Building 20 Cr.
Machinery 267 Cr.

Depreciation
Particulars Value of Asset Rate of Amount of
Depreciation Depreciation
Building 20 Cr. 10% 2 Cr.
Plant & 267 Cr. 15% 40 Cr.
Machinery

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Allocation of Fund to various Departments

Department Fund Allocated (Rs.)

Production Department 20.00 Cr.
Purchase Department 80.00 Cr.
Finance & Administration 27.00 Cr.
Department
Marketing Department 76.33 Cr.
Human Resource Department 68.31 Cr.
Research & Development 200.00 Cr.
Department
Total 471.64 Cr.

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Non – Operating Expense

• Interest:
Total Interest: 130 Cr. x 12% = 15.6 Cr.
Per Unit interest: 15.6 Cr./25000 Units = Rs.6300\-
Interest on Loan: Rs.6300\- x 25000 Units / 3 = 5.25 Cr.

• Excise Duty:
Cost of Sales x 10% = Rs.2,50,000\- x 10% = Rs.25,000\-
Total Excise = Rs,25,000\- x 25000 units / 3
= Rs.20,83,33,250\-

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Purchase Report

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• Total Goods Requirements:
Steel: 2.13 Cr. Kg. {Rs.30/kg}
Tires: 1,25,000 Nos.
Glasses: 1,50,000 Nos.
Fiber and other material required

• Storage of goods purchased in warehouse near production unit.

• Transportation by personal vehicle of company.

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Production Plan

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Production Department

• Total 25000 units will be produced initially.

As we are going to produce 25000 units in 1st year, our business cycle is
having four months time lag therefore production of 8333(25000/3) unites
will be done in 1st lag.

• Utilization of raw material:

- Iron21250000 kg, i.e.1770830 kg/month
- Glasses 150000 Nos.
- Engine 25000 units
- Accessories, etc.

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Cont’d…
• Direct Material required:
Engine: Rs.60000\-
Iron: Rs.15000\-
Glasses: Rs.10000\-
Other material: Rs.10000\-
Total: Rs.95000\-
> 8333 units x Rs.95000\- = Rs.79, 16,35,000\-
• Machinery:
Total Machinery worth Rs.267\- Cr. will be installed in production
department. Machinery will have all necessary equipments with it.
Machinery will be purchased from domestic company.

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Marketing Plan

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Contd…

• Company’s policy is not just to create an automobile but to make it reach

to common man
• To follow it BMIL’s always keeps its automobiles updated with latest
technologies

Quality
Quality Value
Value

Customer
Customer
Satisfaction
Satisfaction

Service
Service !@ #
Detail of Marketing Plan

Variable Cost:
8333units x Rs.17800\- = Rs.14, 83,27,400\-

Fix Cost:
Advertisement Rs.61.50Cr.

Total cost:
Advertisement: Rs.61, 50,00,000\-
Variable cost: Rs.14, 83,27,400\-
Total cost: Rs.76, 33,27,400\-

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Cont’d…
 Name of Car: BLISS – The Pleasure of life

• Survey Report:
We have surveyed in Gujarat, Maharastra, Delhi, Kerala,
Madhya Pradesh, Rajasthan, Punjab, Bengal, and Andhra
Pradesh. Survey was done by Door to door method,
Telephonic, Questionnaire and SMS poll.

• Target Market: Upper Middle class

Reason: Most of the population of India is belonging to
upper middle class.

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Cont’d…
Marketing:
– Competitors: Advertisements by,
• Indica V2 • Hoardings
• Zen • T.V. & Theater
• Radio station
• Alto
like FM
• Santro • Window
• Wagon-R Display
• News Paper
• Broacher
(For advertisements we are going to appoint the advertisement agency.)

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Cont’d…

• Scheme provided to the customers,

- Free accessories to first 5000 customers.
{Wheel plates, Music System, Border slides}
- Free one year Insurance by New India Co.

• After Sales: We offers three free services to customers,

(Km or month whichever is first)
1st 1000km or 1 month
2nd 7000km or 3 months
3rd 25000km or 12 months

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• 10 cup holders. With seating for five, that's two drinks each!

• The Bliss 1.3-litre motor generates 73kW of power and 127Nm of torque

• this tiny 4-cylinder engine is also very efficient, using an average of just
5.8 liters of petrol per 100km

• an AUX jack for iPods and MP3 players

• tilt and reach adjustable steering wheels

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Contd…

• this model comes standard with a 5-speed manual but can be optioned
with a 5-speed automatic

• larger 16-inch alloy wheel that set off the stylish ground -effects body
work

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Engine Specifications

Power: 88kW @ 6600rpm

Torque: 145Nm @ 4800rpm
Fuel Economy: 6.4L/100km (man) 6.7L/100km (auto)
CO2 Output: 151g/km (man) 159g/km (auto)
Gearbox: 5-speed manual (optional: 5-speed auto)

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Organizational Plan

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Remuneration to various departments:
Job title Salary/annul No of employee
Finance Department 2,61,60,000 25
Research & Development Department 2,19,60,000 33
Purchase Department 8,8,0,000 13
Production Department 21,09,60,000 1580
Marketing Department 9,57,60,000 325
Human Recourse Department 2,13,60,000 40
Total 38,50,80,000 2016

Other Activities:
Bonus & Incentives: Rs.15 Crs.
Welfare of employees: Rs.3 Crs.
Training expenses: Rs.5.80 Crs.

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Return:
We are assuming that our business cycle is having four months time lag.
Total Yearly Production: 25000 Units
Production of 1st lag: 8333 Units (25000/3)
Price of 1 Unit: Rs.3,05,000/-
Return from Sales: 8333units * Rs.3, 05,000/- = Rs.2,54,15,65,000/-.

Re-allocation of Fund:
Department Fund Allocation
Production Department 20 Crs.
Purchase Department 80 Crs.
Finance & Administrative Department 27 Crs.
Marketing Department 15 Crs.
Human resource department 68.31 Crs.
Total 210.31 Crs

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 Cont’d…
• The fund available with company after allocation to various department:
Fund available: Rs.2,54,15,65,000/-
(less) Fund allocated: Rs.2,10,31,00,000/-
Net Taxable fund: Rs.53,84,65,000/-

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Risk Assessment

• What we see Risk as Combination of “Threat and Opportunity”.

• Traditional Risk Management – Risk those are devoted to Solving

Management problem.

• Financial Risk Management – Potential loses arising from things such as

interest rate, currency fluctuations, commodity price changes.

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 How do we Assess Risk

• Timely Information

• Speed

• Experience

• Financial & Operational Flexibility

• Resources – a) Financial
b) Personnel

In our organization ,”Risk mgt.” is splintered with little communication between

those who assess the risk & those who make decision based on those risk assessment.

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BLISS -
The Pleasure of Life…

Thank You
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