Jensine Baltazar | Daryl Domantay | Anurag Dighe | Ace Esguerra | Jessica Gonzalez | Timothy Lee

Tesla MotorsJapan

Executive Summary Tesla Motors Inc. was founded in 2003 in Silicon Valley, California

Tesla produces the design, manufacture, and sale of electric vehicles

Entering a new market relies on numerous risk factors like economic, political, and cultural

Marketing aspect, Tesla Motors is an innovative company introducing the world of electric vehicles

Tesla Motors Overview

Mission Statement “It is the mission of Tesla Motors to raise the bar

on the production and distribution of the quickest and most energy-efficient cars on the planet. By leading in technological innovation, differentiation of our content will encourage others to acknowledge the need for change.”

Quality Standard Perceived Value Differentiation

Approach

Tesla’s Goal & Japan’s Commitment Go Hand in

Hand

Country Analysis Brief History in a

Flash Why Japan Partnership Strategy

Legal, Economic & Political System

Vehicle battery

Key Components First competitor advantage

Result= New Venture will create competition

High Risk of Technology Know How Reengineering by the Japanese

Acquisition vs. Greenfield

Product

Economic Analysis Currency and Exchange Rate Risks

1 U.S. Dollar = 89.29 Japanese YenYen slowly gaining in value

Economic Analysis GDP and GNP

GNP currently at -5.3%GDP is at 4.137 trillion U.S. Dollars

○ 4th highest in the world, behind European Union, United States, and China in that order

Economy has been in a state of deflation since 1990s

Economic Analysis Foreign Investment environment

JETRO○ Organization developed to assist with foreign

businesspeopleNikkei 225Currently seeking to acquire more FDI

Economic Analysis Trade Relationships

Imports from China, U.S., Saudi Arabia, Australia, the United Arab Emirates, and Indonesia○ Imports energy fuels like natural gases and oil,

machinery, foodstuffs, and other raw materialsExports to U.S., China, South Korea, Taiwan,

and Hong Kong.○ Exports include vehicles, semiconductors,

machinery, and chemicals

Economic Analysis Quotas, Tariffs, and other barriers to

entryTariffs on various kinds of foods, plastics,

chemicals, and wood○ Few restrictions on natural minerals, ores,

electronics, and vehiclesSubsidizing consumers for ‘green’ energy

sources, such as hybrid cars

Cultural Analysis Population and Demographics

125 million people○ Aging demographic, median age for Japanese

is 45 years old○ Over 20% of Japanese citizens are over 65

years old65% of population live in urbanized areas

○ 10% of population live in TokyoPredominantly Japanese

Cultural Analysis Language and Education

Main language is Japanese, though Chinese, Korean, Filipino, Portuguese, and English are spoken by other ethnicities present.○ English somewhat integrated with Japanese

education systemLiteracy rate at 99%Japanese education system modeled off

Western education systems

Role of Religion Shintoism 83.9%, Buddhism 71.4%,

Christianity 2%, other 7.8% Over 80% are both

Religion in Japan is a private matter

Curiosity about other religions

In business, religion does not play a direct part

Potential Cultural Problems

Definition of cross-cultural literacy

Some different ways to approaching businessI.e: Handling of business cards

Car size problemMost drive small cars due to value of space

Government and Political System

A parliamentary government with a constitutional monarchyFree elections.Representatives.Political parties.

Friendly terms with United States.

Risks of the Political System

The Japanese political system is very stableCulture: Promoting stability and adversity to

riskDeveloped nation

○ Strong economy○ Developed and accepted government○ Civilian rule; free elections

Target Market Sex: Male/Female Marital Status: Single/Married Age: 30 – 60 Income: Middle class – Upper class Tesla Model S – $49,000 Tesla Roadster - $109,000 Tesla Roadster Sport- $128,500

How will this fit into the Market?

-Efficient public transportation system but inconvenient for people live outside metropolitan areas. Many people still drive cars

-Japanese government encourages people to purchase hybrid or electric vehicles. They offer cash incentives to reduce the cost

-Japanese culture is technologically advanced. Tesla electric vehicles are the future

Our Product 2 models of EV’s: The Roadster and Model S

Travel more than 300 miles

Touch screen technology with impressive features

Model S is realistically affordable

Most efficient electric car in the market

Competitors Products

Major competition: Nissan Leaf, Mitsubishi i-MiEV, Subaru Stella

Offers one model and all look similar Seat 4 – 5 adults Prices ranging from $43,000 - $54,000 Travels 56 - 100 miles

Place and Promotion Tesla just entered the Japan EV market EV can be found in the Tokyo sales office,

scheduled appt. In May Shipped 12 Japan Signature Series

Roadsters, exclusive Lots of exposure from press and media lately Word of mouth, online advertising, auto magazines

and blogs Order by telephone, online or showrooms/galleries Build and export the vehicle to you

Legal System Property Rights in Japan are strong

Strong laws created to protect from trademark infringement and black market production

Legal system gives equal preference to domestic and foreign filers

The Necessary Paperwork

Depends on whether producing in Japan or notIf not producing domestically: Must acquire

license to import, because of quotas placed on imports

If producing domestically: No license required. Domestic investment is encouraged

Usually, joining a bank group is encouraged to set up in Japan

Reactions to Investment Investment would be accepted if:

No faux pas are made when enteringA bank group or business group is joined

Tesla would introduce competition to the already highly contested auto market, competition would react swiftly

Risk Assessment Economic Risks Road Transport Conditions Home to Most Technologically Advanced

Vehicles Domestic cars already meet cultural and

economic demand Business Culture restrictions

Top 10 Popular Cars in Japan 2009

     Model Total Unit Sold in 2009

1   Toyota Prius  208,876

2   Honda Fit  157,324

3   Toyota Vitz  117,655

4   Toyota Passo  98,883

5   Honda Insight  93,283

6   Toyota Corolla  90,178

7   Honda Freed  79,525

8   Nissan Serena  78,836

9   Toyota Voxy  71,426

10   Nissan Note  65,745

Conclusion Tesla’s target market to Japan servers positive and

negative reactions

Demand for electric, hybrid and alternative fuel vehicles might not yet be profitable for the country

Company has suffered net losses every quarter

Will not be implemented, but a modification of Tesla producing vehicles can be used in Japan is an alternative