BUSINESS PLAN FOR LEXUS IN MONTERREY
GRUPO INNOVA
INTRODUCTION
In 1997, Eugenio Clariond and René Becerra acquired a Honda dealership in Monterrey, Mx; which employed only 12 people and had sales of 374 vehicles. That was the start of Grupo Plaza which, thanks to a good management program has grown to 10 dealerships, one of which is dedicated exclusively to certified pre-owned vehicles. Today Grupo Plaza is Mexico’s largest Honda distributor with sales of 22,243 units. In 2002, Eugenio Clariond y René Becerra opened the first Renault dealership in the state of Chihuahua, and later opened another one in Monterrey. With these, their presence was extended to the states of Nuevo León, Coahuila, Chihuahua and Tamaulipas, selling both Honda and Renault vehicles. In 2004 they established CLEBER Group and, together with the Toyota Tsusho Corporation of Japan, they formed a Joint Venture to set up a Toyota dealership in Monterrey, called Toyota Innova. A short time later and based on their strategy of becoming the Benchmark in Service, they obtained authorization to open a second dealership in Reynosa, Tamaulipas and yet another in Monterrey – the Sendero dealership. At the same time they inaugurated a modern Body Shop which was the first of its kind in México. Toyota Innova began with sales of 813 vehicles and to date has sold more than 11,200 units. A characteristic of Innova is their unique Benchmark procedures in the after-sales area. Thanks to their good practices, Innova has received numerous awards from Toyota de México and Toyota Financial Services. In 2005, Eugenio Clariond and René Becerra obtained the concession for the Acura brand for the State of Nuevo León and the dealership was established in San Pedro, the municipality with the highest purchasing power in Mexico. Thanks to the strong brand support, the recognition of its investors and sales growth of 65% from its opening until 2007, a second dealership, Acura Cumbres, was opened in Monterrey in 2008. In December of 2007 they acquired Grupo Jidosha in the State of Chihuahua, a Nissan distributor with 9 dealerships located in the most important cities of Chihuahua.
Today CLEBER Group distributes 5 automobile brands, operating 26 dealerships and 4 Body Shops, with assets totaling 1.2 billion pesos and an average annual sales growth rate of 40%. Total sales since its founding have reached 41,558 units and the company now employs 1,183 people. The business philosophy has centered on Social Responsibility, and the main objective of its business strategy is to be the Benchmark in Service. For 2008, the company expects sales of 500 million dollars and to surpass all their proposed goals. During the past 11 years the high levels of customer satisfaction have allowed the group to continue growing in a responsible manner. The Joint Venture with Toyota Tsusho has without a doubt been fundamental, having provided the opportunity for comparing operations with other car dealerships located throughout the world. This partnership has proven to be a success and will strive to bring the same competitive advantages for Lexus in Monterrey. In this way, Toyota Tsusho Corporation will provide their best practices from the operation of their Lexus distributorships in China, England, Corea, Russia and France. The local partners will provide their knowledge of the luxury market in Monterrey, their strong ties in the local market and their knowledge derived from years of being part of the Monterrey community. Proof of the latter is the founding partner of this Group of companies, Eugenio Clariond, a businessman committed to environmental and philanthropic causes, who has held such positions as President of the Mexican Businessmen’s Council and who serves on the board of such global companies as Johnson Controls and of educational institutions such as the Tecnológico de Monterrey. For these reasons, the strategic alliance between CLEBER Group and Toyota Tsusho Corporation represents the strongest option for becoming part of the network of Lexus distributors in México. They know the brand, the regional market and have strong local ties. But above all, they have the passion and the drive to be the best Lexus distributor in the world.
APPENDIX
Messrs. ToyotaMotorSales,Inc. Messrs. ToyotaMotorSalesdeMéxico, S.A.
July 18, 2008
Messrs.ToyotaMotorSales,Inc. Messrs.ToyotaMotorSalesdeMéxico,S.A.
July 18, 2008
Dear Sirs:
DearSirs:
We would like to thank you for providing GRUPO INNOVA with the opportunity to compete for the LEXUS dealership in Monterrey México. At GRUPO INNOVA; TTC and CLEBER have a joint effort that has developed the strategic advantages that assure the best possible dealership in México with world class customer service.
First of all, we would like to express our sincerest gratitude for providing Toyota Innova, our dealer in Monterrey, the opportunity to present a business plan with respect to opening a Lexus dealership in México.
The shareholders of CLEBER have the greatest experience in the Monterrey’s luxury car market, we operate the best and largest Acura dealership in México. We also have strong ties and the recognition in the Monterrey society, therefore the dealership will be supported not only by the essence of perfection of the brand and the best customer service but also the trust that the local community already has for the businessmen who would own LEXUS-INNOVA. We will also take advantage of the expertise that our business partners have in the distribution of the LEXUS brand. LEXUS-INNOVA will have the expe-rience that TTC has gained throughout the world, being able to reproduce the best practices already being mastered by TTC’s operating dealers in the world. Our commitrnent to the brand and the passion to become the best LEXUS dealership globally by providing the greatest service, qualify GRUPO INNOVA as the best alternative to represent LEXUS in Monterrey.
Our mission is to represent the Lexus brand in Monterrey, and through the endless pursuit of perfection, promote Lexus to be the favored choice in the premium luxury purchasing and owning experience. We are confident that we will be able to represent the essence of the Lexus brand due to several of our strenghts. For instance, we will implement the best practices we have cultivated amongst our vast Lexus dealer network in many countries such as the United Kingdom, France, Russia, Korea, and China. Also, we will make the most of our business partner’s expertise of the local market and experience with many dealerships, including Acura. Furthermore, we will make use of the extensive customer database they have built throughout the years. This great alliance, with such remarkable partners, gives us great confidence that we are the best candidate to represent the Lexus brand and fulfill the Lexus brand promise to deliver luxury to let our customers live the most of every moment. We look forward to your positive reply to our business plan. Sincerely yours,
We are sure you will be satisfied with our business plan, since it represents the outstanding efforts of our very committed organization. We look forward to the beginning of an amazingly successful business between LEXUS and GRUPO INNOVA. Sincerely yours,
EXECUTIVE SUMMARY BUSINESS PLAN FOR LEXUS IN MONTERREY
1
Mission Our mission is to promote and provide the best luxury vehicle, with passion and personalized attention, in order to understand the needs of our guests so we can achieve their total satisfaction and loyalty. 2014 Vision We are the most respected Lexus dealership for the excellent service granted to our customers, wich makes us the Benchmark in Service (BIS - PRS™). Therefore, we operate the most profitable per unit Lexus dealership in the world, making the sales of 950 units in 2014 possible. Principles 1.- To honor and to listen to the voice of our guests and associates to improve the financial condition of the company in order to be able to contribute in a responsible manner to the community. 2.- To dedicate ourselves to an enviromentally sustainable operation through the use of recyclable materials and alternate sources of energy. 3.- To promote long term growth, administrative innovation, and team work to achieve a sustained profitability. 4.- To promote a culture of mutual respect, eagerness to learn, and adjustment to change among our associates. 5.- To apreciate and respect the cultural diversity that surrounds us and to be aware of the value that can be created with our commercial and business partners. 6.- To implement a culture of continuous improvement that results in an operation of greater added value. 7.- To recognize the achievements and the operational excellence of our associates. 8.- To encourage openess to the analysis of better practices and the creation of new ideas. Concept The establishment of a dealership worth of commercializing the Lexus brand. Such dealership will have state of the art technology and facilities. The processes will be cautiously designed under the BIS-PRSTM concept, we will have the best IT platform and a CRM system will be used to allow us to deeply know the needs of our customers, therefore we will be able to satisfy and even to exceed their expectations. The dealership will be a global benchmark for the brand because it will have the best practices and will be able to be called the new concept in the administration of a luxury cars dealership in the local market. The customer will be used to be a guest and to know that he will obtain everything he expects in each visit.
OUR STRENGTH 2
BUSINESS PLAN FOR LEXUS IN MONTERREY
Our group has the best experts combination (CLEBER Group), that already has the experience in the introduction and sales of a luxury japanese brand in the local market (Acura), and experts with deep knowledge in the philosophy and operations of the Lexus brand in the world (Toyota Tsusho Corporation). Besides our expertise in the market and the brand, we are a financially solid and stable group which has also had a sustained and successful growth throughout the years. Best Location We have 3 land candidates that are located in the luxury area with the greatest growth potential. The realtor developing this area is aiming for a super luxury cluster and we can be a part of this exclusive complex, once we have the brand distribution. B&P Shop Our group has 4 Body & Paint Shop which have earned great recognition and several certifications. Some of their merits are the following: Body & Paint Shop Innova Certified B&P Shop by CESVI (Centro de Experimentación y Seguridad Vial México) as an A category workshop. Certified by STANDOX-DUPONT in the “Color for Life” program in June 2008. Program in which a 5 year warranty is given in the automobile repainting. First B&P Shop of the brand in México. Standarization and documentation of all of its processes. Significant and acceptable EBITDA. Body & Paint Shop Honda Plaza First B&P Shop certified by CESVI in the region with an EXCELLENCE grade in “Processes and Quality”. First Body and Paint Shop certified by Honda de México in “Processes and Quality” at a national level. Innova After Sales Department Third Place in SSI. Benchmark in the service appointment scheduling program. 2nd best dealership in TSM certification program. Only dealership in México that has the T-60 program which belongs to the TSM Advance Program (not yet in Mx.). Recognition by TMex as a key distributor in the brand’s better techniques development programs (RT). Succession Plan Our succession plan is not only focused in the stockholder’s offspring, we will search for the development of the best people through training. We will also look for the involvement and interest of the next generations.
ORGANIZATION BUSINESS PLAN FOR LEXUS IN MONTERREY
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We have 26 dealerships located in theNorth and Northeast Region of México, covering the States of Nuevo León, Tamaulipas, Coahuila and Chihuahua. In addition, we also have 4 Body & Paint Shops.
Number of employees 406
UIO 24,116
2007 Sales 4,604
1997 Start of Grupo PLAZA
1999 PLAZA Reynosa.
2001 PLAZA Matamoros.
2003 PLAZA Galerías.
2005 PLAZA UNI.
2006 PLAZA Lindavista.
1998 PLAZA Saltillo.
2000 PLAZA Laredo.
2001 First Body & Paint Shop
2005 Our group was chosen
2006 PLAZA Victoria.
2008 The second Acura dealership
PLAZA Vasconcelos.
in the country certified by Honda de México.
Number of employees 66
2002
2004
RENAULT Chihuahua On November the 29th Renault Chihuahua starts operations.
RENAULT Garza Sada On March the 5th Renault Garza Sada was inaugurated. Number of employees 208
2004
2006
INNOVA Fleteros. On April the 14th INNOVA FLETEROS starts operations.
INNOVA Reynosa. August 15th.
JIDOSHA was incorporated in December 2007
UIO 3,425
2007 Sales 677
UIO 11,202
2007 Sales 3,830
2006
2006
Number of employees 451
2007
as the distributor of the Acura brand in the State of Nuevo León.
August 18th. INNOVA Laminado y Pintura (Body & Paint Shop).
UIO 1625
2007 Sales No aplica
INNOVA Sendero.
INNOVA Sendero formally started operations even though they already had a sales point in Sendero Mall.
was inaugurated in Monterrey. ACURA Cumbres.
ORGANIZATION 4
Their mission is to continuously address ever changing needs, develop new business models, and continue offering unprecedented added value to contribute to the creation of an enriched society. TTC aligns all of its processes and businesses to this mission, while it continuosly follows its philosophy, striving for a co-existence and a co-prosperity with people, society, and the Earth, because our associate company focuses on becoming one that creates value and contributes to build prosperous societies.
Operating Lexus / Toyota dealers in 19 countries
Until june 2008
BUSINESS PLAN FOR LEXUS IN MONTERREY
PROFILE KNOWLEDGE OF THE LOCAL MARKET BUSINESS PLAN FOR LEXUS IN MONTERREY
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Through our experience in Acura we have been able to understand that most luxury brand customers live in San Pedro, that is why we made an analysis to define the profile of San Pedro’s residents. Therefore, we would be able to get to know our customers better and to be conscious of their characteristics and possible needs. This profile will help us to develop a more aggressive and incisive sales strategy and we can also be able to implement a more adequate marketing plan for the niche. We will be prepared to understand the behavior and customs of a society that is characterized by the acquisition of luxury goods to be able to offer a product and after sales attention that delights our guests. 1. San Pedro Profile Population: 122,009 people.1 46.7% men and 53.3% women. 31% of the population has undergraduate or higher education. 1 San Pedro has the second highest Human Development index in México (.889). This high living standard is comparable to the ones in countries such as Germany, Spain or New Zealand.2 13% of the income of San Pedro’s residents comes from Corporates and Companies Directors. 1 There are 91, 571 vehicles, of wich 85,144 are private automoviles and trucks. 3 2. Luxury vehicle customer in the Monterrey Metropolitan Area.
Economically active population is 57.7% ( 70,394 people).1 Brand
Per capita income in SPGG: 35,922 USD..1 Per capita income adjusted by PPP: 26,540 international dollars3 Per capita income adjusted by PPP in NL: 16,585 international dollars.3 Per capita income in Mexico in 2005 was 7,401 USD 1 Per capita income adjusted by PPP: 11,317 international dollars.3 In Spain was 26,031 USD. 3 Per capita income adjusted by PPP: 27,270 international dollars.3 1. Conteo Nacional de Población y Vivienda INEGI 2004 2. Índice de Desarrollo Humano Municipal en México PNUD 2004 3. WorldBank.org
Old Money / Traditional
AMIA,Automotive News, OEM Data
Established Executives and Professionals
Young Executives and Professionals
MARKETING STRATEGY 6
BUSINESS PLAN FOR LEXUS IN MONTERREY
National Strategy To establish the Lexus Identity (Branding Strategy). Model Positioning. To sponsor recreational activities nationwide. Personnel Training. We will support the marketing strategy dictated by LMex with an excellent local deployment. Local Strategy Lexus brand image To communicate the ideas of the “Lexus Value” and the “Lexus Identity” to the Monterrey society. Brand Awareness To launch and to introduce the Lexus brand. Dealership location. Direct Contact with society (Word of mouth). Lexus Dealership Image (C.S.R) Charities. Donations and participation in green projects. Focus on the creation of the “ideal client” Direct contact with customers. Establishment of an excellent CRM system. Differentiation from Mercedes Benz and BMW Buying experience and owning experience of a Lexus. Marketing Tactics Mass Media Advertisement Local television does not reach the intended target. Newspapers, Magazines, In-Flights Magazines.
One to one marketing Direct Mail, Direct E-Mail. We can use the database from Platinum American Express. Show Room Events Gives continuity to the relationship with customers. To invite prospects to be Lexus customers. To create an image that supports our society involvement. Introduction/Launching of new models. Sponsoring Activities Sporting Events. Concerts Art Exhibitions. Courtesies Coupons to dine in distinguished places, Spa sessions, etc. Tickets to VIP events.
LOCATION BUSINESS PLAN FOR LEXUS IN MONTERREY
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Our land candidates are the best option out of all the possible locations in Valle Oriente, the most exclusive residential and commercial zone with the highest growth potential in the next few years. Our land candidates are close to the soon to be most modern zone of the city. The neighboring land locations will hold the best cardiology hospital in the country and Latin America, a W hotel and a luxury departments tower. Besides, in this zone the construction of the tallest and most modern building in Latin America is projected in the following years. Our land candidates offer quiet traffic for our exclusive customers, nevertheless having an adequate exposure. The exclusive access is still granted offering higher security for our guests.
Possible locations Competitor dealerships 1 2
3
LOCATION 8
Between W Hotel and Cardiology Hospital
BUSINESS PLAN FOR LEXUS IN MONTERREY
LOCATION BUSINESS PLAN FOR LEXUS IN MONTERREY
9
Between Novotel Hotel and Gas station
LOCATION 10
FIAT and plot besides it
BUSINESS PLAN FOR LEXUS IN MONTERREY
FACILITIES BUSINESS PLAN FOR LEXUS IN MONTERREY
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Our Lexus dealership will be a green building. Our construction role model for this dealership will be the Toyota offices at Torrance, California. The offices are about 624,000 sq. feet and it is considered the “green giant�, in fact, it is the largest green facility in the US. Recyclable materials and processes will be used since the beginning of its construction, as they were used in the Toyota building. We thought of building the first dealer that has an environmental impact in the area and with this, increasing the ecological responsibility image of the Lexus brand. The dealership will try to make the use of electrical energy and gas as efficient as possible. Recycling water and waste handling systems will be used. The use of sustainable, natural and non-toxic materials that require minimum manufacturing processes in their elaboration will be encourage for the construction of this building.
OPERATIONS 12
BUSINESS PLAN FOR LEXUS IN MONTERREY
BENCHMARK IN SERVICE STRATEGY (BIS) We provide our customers with attention and individual assessment “face to face” so that they delegate their confidence and trust in the long run in experts of all the areas of our automotive business in the different markets in which we operate in México. The consequence is that we will be the Benchmark in Service and we will generate and EBIT/ operational assets of 20% or more.
SUCCESSION PLAN BUSINESS PLAN FOR LEXUS IN MONTERREY
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For Lexus Innova Monterrey, we will be looking forward to create a human capital inventory, to promote the growth of our personnel through intensive training programs that would help them to maximize their development. The next generations will play an important role in the succession of our Lexus dealership. Involvement in the business from an early age and participation in every process will be promoted. To be able to make themselves creditors of a role in the organization the successors will have to demonstrate their capabilities and will compete for the job position against the human capital of our company. Our next generations will be asked to excel in academic formation (Undergraduate and Graduate Education), in training and performance in their job position. They will have to earn the respect and admiration of the personnel to be able to occupy a leadership position. In our Lexus dealership, the business will keep its primary importance, family matters will never be placed over those of the company’s. If the successor is an optimal candidate, he will be given the opportunity, otherwise, a capable person will be found to lead our business.
HUMAN RESOURCES 14
BUSINESS PLAN FOR LEXUS IN MONTERREY
General Manager’s Profile
Personnel Profile
Graduate education. Recognition of Monterrey’s society. Bilingual 100% (English-Spanish). Business Vision. Focused on results. Knowledge of best practices in a wide variety of business areas. Teamwork abilities and sensibility for service attention. Leadership and personnel management qualities. General market knowledge.
Personnel with customer service attitude. Eager to learn. Trustworthy and respectful. Teamwork abilities. Evolution and adjustment abilities. Minimum education level for their key activities.
FEASIBILITY STUDY ESTUDIO DE FACTIBILIDAD BUSINESS PLAN FOR LEXUS IN MONTERREY
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CONCLUSION 16
BUSINESS PLAN FOR LEXUS IN MONTERREY
WE OFFER DIFFERENTIATION THROUGH THE FOLLOWING:
Market Knowledge. Human quality of our personnel. A culture of focus on our client. An exceptional service for each of our guests. Passion and energy: Lifetime Commitment to the brand Proof of commitment with the Nuevo Le贸n society. Best location. To transform Lexus Innova Monterrey in a worldwide service and customer satisfaction Benchmark.
We are certain that our people make all the difference.