Cost Benefit Luxgen

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Cost – Benefit – Risk Analysis

Cost
START UP COST

Joint venture investment
Expatriate employee (managers)
Employee insurance
Employee benefit
Employee allowance

Land purchase/Renting expenses
Showrooms
Parking lot (if need)

Labor cost
Expatriate employee (managers)
Local employees
Employee insurance
Employee benefit
Employee allowance
Space requirements
Air-conditioner
Total seats
Decorations
Tableware
Air-conditioner
Recruiting expenses
Supervisor/Guard

Training expenses
employee orientation for sellers
Administrative expenses
including visa on arrival, corporate administration tariff, tax rates Marketing expenses

Income Statement (per month)

Showroom

SALES:
SUV
MPV 7
Sedan 5
Total Sales:
Transportation expenses
Storage expenses

LABOR COST
Salaries and wages
Expatriate allowancesTotal Cost of Good Sales:
Employee benefitsGross Profit:

OPERATING EXPENSES:
Insurances

Total labor costs:
Employee Training expenses
Direct operating expenses
Music and entertainment
Marketing
Repair and maintenance
Showroom insurances
Employees insurances
General and administrative expenses

Occupancy and Utility costsTotal operating expenses:
Utility services
Occupancy costs

Depreciation

Rent
Interest expensesParking lot
Total Occupancy and Utility Expenses:

Equipment depreciation

Interest

Cost of starting doing business
Standard cost of investment in Indonesia including visa on arrival, corporate administration tariff, tax rates, regional minimum wage rates, work overtime and overtime wage rate, water tariff, electricity base tariff, telephone service tariff, internet tariff.

Joint venture investment

Shopping center showrooms
Building dealerships among 5 biggest cities (Surabaya, Bandung, Bekasi, Medan and Jakarta).

Advertising
Each year automakers spend billions on print and broadcast advertising; furthermore, they spent large amounts of money on market research to anticipate consumer trends and preferences.

While car companies do sell a large proportion of vehicles to businesses and car rental companies (fleet sales), consumer sales is the largest source of revenue. For this reason, taking consumer and business confidence into accountshould be ahigher priority than considering the regular factors like earnings growth anddebt load .

Benefit
Indonesian automotive market is continuing to flourish. Strong GDP-growth of approximately 6.5 percent, ever-increasing income and the growing number of offers in consumer credit for making motor vehicle purchases, are driving the increase in demand for motor vehicles. The sales volume of luxury cars and premium cars in Indonesia is very small compared to other ASEAN countries such as Singapore and Malaysia. The industry minister forecasts annual sales of 2m cars by the end of the decade (in 2013 will Indonesia hit the 1m point), at which point Indonesia will have long since overtaken Thailand as the biggest market in ASEAN region.

Potential benefit in segment of Luxury cars and premium cars is high. Slightly below that segment of the market, Indonesian sales this year by the German premium carmaker BMW are up 45 percent, faster than its 25 percent growth in 2011.Overall car sales in May rose 57 percent, the highest rate in eight months and more than twice the rate seen in China. The market share of luxury car is still below 1% from the total national sales although several agents claimed to book a record in the sales of luxury car this year.

Luxury sedan in entry level, medium, premium and sport segment controlled 55.33% or 3.360 units of the sales. Meanwhile, non sedan with 4x2 size...
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