REVENUE STRATEGY - HONDA

1. Honda will launch a hybrid-only model in 2009:
It will produce 200,000 of the new hybrids per year in Japan
It will sell them initially in North America, Europe and Japan.
It will offer the cars at a "more affordable price level" than currently available.
2. It will launch its first-ever hybrid sports car, based on the CR-Z concept car.
3. It will continue to look to fuel cell technology.
4. It will also begin leasing a small number of its FCX Clarity hydrogen fuel-cell vehicles in Southern California for $600 a month.
5. It will introduce its new, clean, diesel engine technology into the U.S. in 2009
6. It is expanding capacity:
It is opening a new factory in Indiana in the US next fall.
It doubled capacity at its plant in Bangalore, India, to 100,000 this year and has begun building a second auto plant, which will be operational from 2009.
It will begin production at another new plant in Thailand in the second half of next year.
It is adding capacity at its Brazilian plant
It began construction of new factory in Argentina last month.
7. It does not have high expectations for plug-in hybrids, which can be charged overnight using a home electricity supply.

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REVENUE STRATEGY - GENERAL MOTORS

1. General Motors Corp., the world's largest automaker, plans to invest as much as $5 billion in China over the next five years to expand its share of the world's fastest-growing major car market.
2. It will spend about $1 billion a year on car and engine development, production facilities, technical and after-sales support and infrastructure.
3. It is investing $250 million to build a research laboratory in China
4. It relies on Asia and Latin America for profit in contrast to its home market, where it is closing factories and cutting jobs. It is cutting first-quarter North American production 11 percent after its U.S. sales dropped by the same rate in November. It will sell more than 1 million Cadillacs, Buicks, and other models in China in 2008, a more than 150-fold increase in sales over a decade.

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EXPENDITURE STRATEGY - DELPHI CORP

Delphi Corp., the largest U.S. auto- parts maker, has planned to change the payouts to creditors under its new Chapter 11 reorganization to plan exit from bankruptcy, giving creditors more securities instead of cash, because it wasn't able to obtain an exit loan as large as it had originally intended.

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REVENUE STRATEGY - GENERAL MOTORS

GM has developed a hybrid technology that may be superior to Toyota’s for heavier vehicles. (Chrysler, BMW, and Mercedes-Benz interested in creating hybrid versions of their SUVs, turned to GM's technology.)
[In a few years GM may be earning more than a half-billion a year from other car companies licensing its technology, a big portion of which will be related to hybrids and plug-ins.]

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REVENUE STRATEGY - PORSCHE

1. Porsche, the world's most profitable carmaker, plans to boost its stake in fellow carmaker VW to 31% from 27% as it benefited from a strong financial performance from VW.
2. It reassessed the value of its VW stake and added a one-off positive charge to its accounts of 520.8m euros.

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REVENUE STRATEGY - TATA MOTORS

1. Tata Motors Ltd., India's biggest maker of trucks and buses, sold $450 million of bonds overseas to fund developing new cars and commercial vehicles and meet its plan of spending 120 billion rupees in the next four years to take on competition from Navistar Inc. and Hyundai Motor Co. that are expanding in India.
2. The five-year bonds can be converted into local shares at 960.96 rupees at a conversion premium of 40 percent from the stock's closing yesterday.

Without new models it is hard to sustain revenue in the automobile industry.

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REVENUE STRATEGY - CONTINENTAL

1. Continental AG, the world's fourth-biggest tiremaker, is working on three to five relatively big acquisitions apart from Siemens AG's VDO automotive unit
2. It would consider buying VDO even if Siemens proceeds with its preferred option of holding an initial public offering for the automotive unit, because together they would about match the size of Robert Bosch GmbH, currently the world's biggest car-parts maker.

Competition can be self-improving

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EXPENDITURE STRATEGY - FORD MOTOR

1. Ford is looking to sell Jaguar and Land Rover to
(a) Eliminate the risk of further losses from antiquated manufacturing facilities in Britain, onerous labor pacts, and a bloated workforce. (For the year ended Dec 31, 2006, Land Rover sales are down 13% and Jaguar down 36.5%)
(b) Use cash from the sale to accelerate its North American restructuring
2. It wants to sell the brands as a package since the engineering, purchasing, and distribution of the two brands have become interdependent as Ford has tried to find efficiencies running the businesses. Jaguars and Land Rovers are even manufactured at a common plant today.
3. It may reduce the number of far-flung dealers it has selling Fords in one retail channel and Lincoln Mercury vehicles in another. It may shut down Mercury and sell Fords and Lincoln in one channel. A second distribution channel could be Volvo and Mazda.

Dispose of products revenues with uncertain to save on their unproductive expenses

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EXPENDITURE STRATEGY - NISSAN MOTOR

1. Nissan Motor Co., Japan's third- largest automaker, buys minicars from other manufacturers including Suzuki Motor Corp. instead of building them itself.
2. It will outsource the manufacture of Clipper Rio to Mitsubishi Motors Corp.

Outsourcing manufacture = (i) outsourcing some costs of bad times and (ii) outsourcing some revenues of good times

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REVENUE STRATEGY - NISSAN MOTOR

Nissan Motor Co., Japan's third- largest automaker, introduced
a) the Atlas F24 light-duty truck and
b) Clipper Rio minicar
to stem a decline and revive domestic sales.

New product = new scope and new hope for revenue

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REVENUE STRATEGY - DENSO CORP

1. Denso Corp., the world's largest listed auto-parts maker, plans to hire 2,000 engineers by 2010 as its biggest customer, Toyota Motor Corp., increases production of hybrid and other alternative-fuel vehicles. A hybrid vehicle combines a conventional gasoline engine with an electric motor. The motor powers the vehicle at low speeds, and the gasoline engine kicks in as the car gains speed. The motor's battery pack is charged by the gasoline engine and by power regenerated by the brakes.
2. The bulk of growth will be in Japan, where 1,100 new engineers will be hired. This year, Denso plans to hire 110 engineers worldwide.
3. The parts maker needs to increase hiring to sustain profit growth that has outpaced Toyota's over the past three years.
4. It is cooperating with Toyota in the development of different types of hybrid cars including gasoline- ethanol and diesel-bio fuel types
5. It will produce auto-related chips at a new plant in Hokkaido. It will need to build another facility to produce wafers in about five years
6. It will also expand production of diesel engine components to increase market share in Europe, where diesel-powered cars command half the market. It will produce diesel particulate filters in a joint venture with Robert Bosch GmbH in a factory in Eastern Europe.
7. Denso will also release an improved 2,000-bar diesel engine common rail system next year.

Following market trends leads to revenue

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EXPENDITURE STRATEGY - TWO-WHEELER MAKERS (INDIA)

State Bank of India and other lenders will charge borrowers more for auto loans. GE Money, the consumer finance division of General Electric Co., stopped advancing new loans for purchasing motorcycles and scooters as it wants to concentrate resources on high growth and high profitability businesses in India. And the monsoon months (June to September) slow two-wheeler sales.

So:
1. Hero Honda Motors Ltd lowered output this month.
2. Bajaj Auto Ltd. will reduce production by as much as 10 percent to reduce stocks at dealerships
3. TVS, which makes about 55,000 motorcycles a month, has cut motorcycle production by as much 5,000 units a month.

So is it a sign of over investment that:
1. Hero Honda and its affiliates are spending 22 billion rupees to build two new factories, in addition to the existing two, near New Delhi?
2. Bajaj started a new factory in April in the northern state of Uttarakhand?
3. TVS opened a facility in the northern Himachal Pradesh state?

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REVENUE STRATEGY - AUDI VOLKSWAGEN

1. Audi AG, Volkswagen AG's luxury division, took control of the namesake brand's Brussels factory today to add capacity for building the new A1 small car beginning at the end of 2009.
2. It plans to add 18 new models by 2015, nearly doubling its lineup to 40 vehicles.
3. The plant's workers voted earlier this year to extend the workweek without additional pay in exchange for investments to build the new Audi model and employment guarantees.
4. Audi plans to build the A3 compact model and some Volkswagen- brand models at the factory until the A1 is ready for production.

Revenue is in not leaving any stone unturned

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REVENUE STRATEGY - FORD MOTOR

Ford Motor's most fundamental problem has been its dysfunctional, often defeatist culture that has degenerated it into a symbol of inefficiency where employees rationalize mistakes instead of fixing them and short term "assignments" rather than jobs discourage cooperation with other divisions and regions. According to an audit designed to uncover cost-cutting opportunities, no two vehicles in Ford's lineup share the same mirrors, headlamps, or even such mundane pieces as the springs and hinges for the hood. It lost $12.7 billion last year. It had to endure the indignity of pledging its factories, headquarters, and the rights to the iconic blue oval logo to the banks and bondholders just to get enough money to finance its turnaround plan.

So now:
1. Ford wants managers to think more about customers than their own careers.
2. It has made it a top priority to encourage its team to admit mistakes, to share more information, and to cooperate across divisions.
3. It wants to get the number of car platforms down to five or six platforms (similar to Honda) from the present thirty.
4. Its CEO is asserting more control over the product line. Now he personally approves every new vehicle worldwide.
5. Its global product development team is designing cars that can be easily adapted to appeal to worldwide markets. They've developed a global small car that Ford will build in two or three plants starting in 2010, and which will sell in the U.S. for $10,000 to $12,000. It will differ only slightly from the version that will sell in South America, Europe, and Asia.
6. Another key goal in the near future is to create a midsize sedan that could serve both North America and Europe.
7. It is forcing every operating group to share all its financial data with every other group because "You can't manage a secret."
8. It has turned the traditional monthly meeting of divisional chiefs into a weekly affair. Every executive has to attend in person or by videoconference. No subordinates can be sent. Operating chiefs are now encouraged to bring a different subordinate to every meeting - a big step at a company where underlings formerly were not privy to sensitive data. It wants staffers to start buzzing about its ideas through unofficial e-mail, blog, and watercooler channels.
9. It is also taking symbolic steps to treat white-collar and blue-collar employees more equitably. This year many workers on the shop floor will receive bonuses of $300 to $800, based on a new formula that is also being applied to executives.
10. It is breaking long-standing company taboos, such as the one about never admitting when you don't know something.

N.B: Even mind-set affects revenue

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REVENUE STRATEGY - GENERAL MOTORS

General Motors wants to make China the No. 2 Cadillac market because of its growing ranks of millionaires, a booming stock market, and booming economy. Cadillac is counting on its brash brand of American luxury to differentiate itself from the pack.

1. It is treating high-end shoppers in China like VIPs to coax them away from BMWs and Audis to its Cadillacs.
2. Attendants greet visitors by the polished-glass entrance
3. Cigars and Napa Valley wines are on offer at a black-marble bar
4. VIP rooms with leather sofas provide a comfortable venue for dealmaking.
5. There's an exhibit of the brand's 105-year history—with a movie and details on features such as hand-stitched leather seats and authentic wood trim—to show off Caddy's pedigree.
6. It has more than doubled the number of showrooms on the mainland in the past year and it offers five models.
7. In February, Cadillac introduced a China-designed and -built version of its SLS sedan four inches longer than the U.S. model for Chinese customers who like a roomy backseat since they tend to have chauffeurs.

Is the high-end market demand actually elastic to pampering?
Can it be blinded from quality, reliability and durability?

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REVENUE STRATEGY – HYUNDAI MOTOR

1. Hyundai, the South Korean automaker is desperate to convince American consumers that its cars and SUVs are worth premium prices.
2. Its quality is actually ahead of Toyota's in J.D. Power's Initial Quality Study, and behind only Lexus and Porsche.
3. It has an array of new models with quality and styling at levels unimaginable even as recently as five years ago and more discounts.
4. It is looking for a new marketing story focused on repositioning Hyundai as an overachieving, underappreciated brand that smart people are discovering.
5. It opted for San Francisco-based Goodby, Silverstein + Partners
6. Its campaign, due out by June, is expected to blanket TV, the Internet, and newspapers with data about safety ratings, quality, and value pricing using a tone of "disarming honesty." The idea is to create an environment where neighbors and co-workers of Hyundai buyers completely understand why they bought a Hyundai. It compared the automaker's difficulty persuading people to trust and admire Hyundai to Galileo's persecution for suggesting the earth rotated around the sun.

Why do they say you cannot keep a good man down?

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REVENUE STRATEGY - VOLVO

1. Volvo AB, the world's second-largest truckmaker, plans to spend 935 million kronor to build a Russian plant
2. It boosted European capacity 5 percent in the first quarter and will further increase production in the second quarter to meet the rising demand.
3. It has been spending money on acquisitions. It announced a friendly bid to buy Nissan Diesel Motor Co and would spend 7.4 billion kronor to raise its Nissan Diesel stake to 96 percent from 19 percent.
4. Volvo's construction equipment division earlier this year agreed to buy Ingersoll Rand Co.'s road building-equipment unit for $1.3 billion in cash to become the world's third-largest maker of construction equipment and better compete with Caterpillar Inc. and Komatsu Ltd., the world's two-largest makers of heavy equipment.

Service the sympathetic markets but work out the difficult ones too

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EXPENDITURE STRATEGY - HONDA MOTOR

1. Raising cash dividends attracts more investors than buying back shares.
2. Honda Motor Co., Japan's second- largest automaker, plans to pay out more of its profit in dividends to boost shareholder returns that have lagged behind Toyota Motor Corp to lure more investors even as it forecasts profit will fall for a second year due to higher costs for aluminum and precious metals.
3. The company will pay out 30 percent of net income in dividends within two to three years compared with 25 percent this fiscal year. The automaker plans to pay 80 yen a share this business year, up from 67 yen a year ago. The company is paying 20 yen every quarter this fiscal year.

More investors = lower cost of capital

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REVENUE STRATEGY - MARUTI UDYOG

New product (replacing unpopular product) = more revenue
More production = more revenue in growing market
Overinvestment = problem

1. Maruti Udyog Ltd., India's biggest carmaker, introduced its first new sedan model in eight years to defend market share as Honda Motor Co. and Hyundai Motor Co. expand into Asia's fourth-biggest auto market.
2. It will sell the SX4 base model for 618,000 rupees ($15,220) in New Delhi 9 percent cheaper than the competing 1.5 liter Honda City (677,000 rupees).
3. The SX4 with a 1.6 liter gasoline engine is Maruti's fourth new model or upgrade in nine months.
4. The new model replaces the Baleno sedan
5. Maruti plans to introduce more sedans in India as higher incomes may encourage more people to upgrade to bigger cars. Sales of sedans gained 11 percent to 244,247 units in the year ended March 31.
6. Maruti is investing as much as $2 billion by 2012 to increase capacity and produce new vehicles.
7. Suzuki, which owns 54 percent of Maruti, is considering shifting some exports from Japan by shipping vehicles built in India to the Middle East and Africa.

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EXPENDITURE STRATEGY – KIA MOTORS

Kia Motors Corp., an affiliate of South Korea's biggest automaker has
1. Cut production to upgrade a factory.
2. Opened its first European plant in December and it is building another plant in the U.S. state of Georgia to cut its exposure to currency fluctuations. The won has appreciated 7.9 percent against the dollar since the start of last year, cutting the repatriated value of Kia's overseas earnings.

Learning some Japanese may help:
Kaizen - continuous improvement,
Pokayoke - mistake proofing
Obeya - face-to-face brainstorming sessions between engineers, designers, marketing pros, and suppliers
Etc….

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