Driven by the 2009 global economic crisis, Dacia Romania designed and built the Dacia Duster sport utility vehicle (SUV) to be the ideal SUV at an affordable price. After a successful introduction of the cheapest modern sedan on the international market in 2004, and among the cheapest modern seven-seaters in 2006, Dacia planned to introduce what it hoped would become the cheapest modern SUV on the international market. The main challenge Dacia was .....more

For more than a decade, the government of China had sought to develop an automotive industry. The government's initial steps involved the creation of joint ventures in which government-owned firms became partners of foreign privately owned corporations. Most of these joint ventures were extremely successful financially. However, ongoing differences in management preferences created a continual tension within the joint ventures. Of particular .....more

The case describes the challenges faced by Ford and other automobile manufacturers in an era of declining oil reserves and volatile fuel prices. The Ford diesel decision seems to reflect classic thinking constrained by mental models that were developed in a different world. Diesels constitute over 50 per cent of automobile sales in Europe, because fuel is extremely expensive there. If fuel gets extremely expensive in the United States, one would .....more

In April 2005, the chairman of ASIMCO Technologies, a company headquartered in China and supplying automotive components to both Chinese and global clients, was trying to decide on his company's reaction to the Chinese government's latest regulations on auto emissions. Guo-san (National Standards III) was to take effect on August 1, 2008. By that date, automakers would not be allowed to supply the Chinese market with non-Guo-san-compliant .....more

In early 2005, South African company Tiger Wheels Limited (Tiger) had established a global footprint in the manufacture of aluminum alloy wheels with customers comprising several high-end automotive producers. It was the 10th largest alloy wheel company in the world with a solid balance sheet and net current assets of $42 million. Tiger had a chance to expand and grow with the potential purchase of a new world-class alloy wheel facility in Kentucky, .....more

In January 2007, Tiger Wheels (Tiger) and ATS informed its lead banker in Germany that it was forecasting a breach of its covenants, just 18 months after acquiring the Kentucky wheel plant. This was a critical matter and, as a result, the top management at Tiger was intimately involved in the deliberations. ATS had borrowed from a consortium of European banks to fund its growth. The borrowings were covenant driven and not set against any ATS assets. .....more

In July 2009, General Motors Company (GM),the world's second largest automotive enterprise, has come out of a bankruptcy orchestrated by the U.S. federal government. Leaner and focused after a 40-day exercise, GM is still a long way from a full-fledged financial recovery. The company is under a mandate to concentrate first on its U.S. market. Its European subsidiary, which manufactures the Opel cars, has been struggling for nearly a decade. .....more

In 2005, the Qianjiang Group (QJ), a large-scale Chinese state-owned group, acquired the Italian company Benelli to expand its business in Western markets beyond Italy. Benelli’s brand advantage was intended to provide the core competency for QJ to compete in the global motorbike markets; in addition, Benelli’s capabilities and know-how in motorbike and scooter engineering also helped QJ complete its product portfolio. After a successful start, .....more

The investment manager at Prairie Ventures Limited, a Saskatchewan based venture capital firm, is examining the merits of financing a management buyout of Crestline Coach, a manufacturer of ambulances and distributor of buses. Students must design a term sheet and create an appropriate financing package. Students are provided with an Excel model to assist in their analysis.

Otoyol Motor Company, a large commercial vehicle manufacturer, is on the verge of being liquidated by its shareholders. Despite all efforts to maintain its competitive position, the company has been caught in a downward spiral. Erosion of its first mover advantages, shifts in industry core competencies and changes in consumer preferences have depreciated the company's value proposition and deteriorated its market share. Utilizing empirical data, .....more