Joint Venture Proposal for AutoThai Corperation
Submitted by General Motors Corporation
Why General Motors Corporation?
1. Market Leader.
General Motors has the largest market share of cars and trucks worldwide. We are also the world~s largest producer.
General Motors is the leading car and truck producer in the US, which is widely regarded as the most competitive and the largest single market.
GM is the biggest company in the world in terms of revenue.
2. Variety of Products
GM has the largest number of brands of any company:
3. Quality Products
GM has secured a #1 ranking among top ten volume manufacturers in overall customer satisfaction on the prestigious J.D. Power Early Buyer Survey for cars and trucks in the US. This award is particularly important considering that the US is widely regarded as the most open, most competitive, and least profitable market in the world.
4. Proven Track Record Internationally
GM sells cars and trucks in 170 countries and has manufacturing, assembly, or component operations in over 50 countries.
We have the largest global reach of any automotive manufacturer.
*We have a successful on-going joint venture with Toyota
5. Environmentally Conscious
GM is concerned about our world~s future. We have developed the GM Impact, an electric vehicle, that is slated to go into mass production in the near future. It would be the first such electric vehicle that would be competitive with gasoline-powered cars and the first is going to be produced in volume quantities.
Currently, GM has one of the world~s most efficient cars in the Geo Metro. This economical car is rated as having the highest gas mileage by the Envioronmental Protection Agency (EPA), a US federal government agency.
6. Offering a range of significant related services
~ Delphi Automotive Operations:
~ Hughes Electronics:
~ Close relationship with Electronic Data Services (EDS):
~ General Motors Acceptance Corporation
Our Proposed Car
The 1996 Chevrolet Lumina Passenger Minivan fulfills all the characteristics desired by your RFP. The 7 passenger Minivan offers reliability, confort, affordability, is relatively fuel efficient and ecological.
1. Low Maintenance and Reliable
The Chevrolet Lumina Minivan would enjoy the same full-service warranty as it is offered in the US We offer such a long warranty to demonstrate that we believe in the quality and engineering of our products. Fiberglass-like plastic body panels, bonded to a steel space frame, mean no rust worries. Acceleration is outstanding with the new standard 180-horsepower, 3.4-liter V-6 engine, not only from a standing start but when merging and passing. Upshifts are quick and barely discernible with the electronically-controlled four-speed automatic.
2. Low Cost:
The Chevrolet Lumina front total cost of production is $17,404.
The Chevrolet Lumina Minivan is engineered with safety and confort in mind. The van absorbs bumps capably, almost gliding past a lot of them. A driver's airbag and anti-lock braking are standard. In keeping with Chevy's family focus, integral child seats are available.
Four-Wheel Anti-Lock Brakes: Standard
Driver Air Bag: Standard
Integrated Child Seat: Optional
Crash Test Results as rated by the National Highway and Traffic Safety Association, a US Federal governmental department
4. Fuel Economic and High Mileage:
Note: This proposed minivan is equipped with a very powerful V-6 engine, the most powerful standard engine on any minivan. Such a minivan is ideal for large families and small businesses. A less powerful engine could be substituted to improve fuel economy if necessary.
5. Performance and Standard Features:
Plant Yearly Production Capacity
First, GM accepts an initial capacity of 50,000 cars per year and a restriction to triple capacity through the first five years. We want to clarify that GM reserves the option to increase capacity.
Second, the initial export restriction limit of 25% is agreeable for the first year. However, GM would like to reserve the option to increase exports beyond that percentage for future years.
Type of Ownership
It is GM~s understanding that this contractual joint venture will result in the formation of a private limited liability company.
Board of Directors
This structure is optimal because of GM's greater expertise and experience in automotive manufacturing. A GM majority in the Board of Directors will allow GM to choose management to optimize both production and profitability. Also, GM must have day-to-day control over management of operations of the plant.
GM agrees to the capital structure suggested of 50% equity and 50% debt. GM agrees to finance 70% of the equity with AutoThai financing the remainder. The remaining debt will be borrowed by the new joint venture and will be backed by the full faith and credit of the Thailand government.
Tax and other incentives
GM believes that an 8 year tax holiday from corporate income tax is necessary to allow this joint venture to become economically stabile and eventually profitable. GM also understands that losses will be allowed to be carried forward and deducted as expenses for five years after the tax holiday.
Since the Thailand government wishes to develop a car manufacturing industry, then it would be in their best interests to grant a free trade zone in a city of your choice with access to seaports.
Amendments to the RFP:
Repatriation of Profits:
GM will be allowed the option to repatriate all of its profits at any time.
Dispute Settlement Forum:
Any and all disputes will be settled under US courts and laws.
AutoThai agrees to a nondisclosure agreement stating that they will not reveal any sensitive GM technical or product knowledge. Non-Competitive Agreeements AutoThai agrees to a noncompetitive agreement stating that they will not enter into the Thailand car market for a period of five years following any break-up of this joint venture with GM.
Furthermore, the joint venture with GM will be exclusive. AutoThai agrees that they will not enter into any kind of information sharing or any type of joint venture with any other joint venture with any other auto manufacturer.
1996, GM Team Designed and Maintained
by Zan Kuang.