Basic Utility Vehicle

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Basic Utility Vehicle

• Institute of Affordable Transportation
• University of South Carolina IMBA

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BUV Current Design
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IAT Creating the BUV

• Cost (as a kit)
• Payload 1000 lbs
• Top Speed 20 mph on grass
• Mass / Weight 500 lbs
• Range 100 miles
• Width small pick-up bed)
  
• Engine Internal combustion engine (10 hp)
• Drivetrain Two wheel, front-wheel drive
• Materials UV resistant, water resistant,
  corrosion resistant
  
• Assembly time 8 man-hours per unit

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Africa

• Primary market for the BUV
• 52 countries
• Tanzania
• Namibia
• Lesotho

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Selection Criteria

• Adjusted Per Capita GDP
• Political Stability
• Ease of Importation
• Availability of Distribution
• Port Facilities
• Foreign Investment
• Population

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Namibia Country Profile

• Area 823,145 sq. km. (320,827 sq. mi.)
• CapitalWindhoek, pop. 200,000 (2000)
• Terrain Varies from coastal desert to semiarid
  mountains and plateau
  
• Climate Semi desert and high plateau

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Demographics

• Population 1,927,447 (2003)
• Only 31 of the people were urban residents in
  2001
  
• Ethnic groups Black 87 White 6 mixed race
  7
  
• Languages English (official) Afrikaans, German,
  various indigenous languages

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Major Economic Indicators

• GDP (2001) 8.1 billion
• Annual growth rate (2001) 4
• Per capita GDP (2001 est.) 4,500
• Inflation rate (2001) 8.8
• Agriculture contributes only 12 to Namibia's
  GDP
  
• 70 of the Namibian population depends on
  agricultural activities for its livelihood

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Major Economic Activities

• Agriculture
• Livestock raising
• Subsistence agriculture
• Industry
• Mining (33 of GDP) diamonds
• Manufacturing (20 of GDP)
• International Trade (2000)
• Exports 1.4 billion (mainly diamonds, copper,
  lead, uranium, beef, cattle, fish, karakul
  pelts)
  
• Imports 1.6 billion (foodstuffs, construction
  material, manufactured goods)
  
• South Africa, Angola, Botswana, Germany, U.K.,
  U.S.A.
  

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Infrastructure

• World-class civil aviation facilities
• Extensive, well-maintained land transportation
  network
  
• 66,467 km (41,301 mi) of roads and 2,382 km
  (1,480 mi) of railroads
  
• the Trans-Caprivi and Trans-Kalahari Highways
• Walvis Bay Port an important commercial gateway
  to the Southern African region

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Small Vehicle Industry Overview
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Small Cargo Vehicle Imports

• Inexistent information
• South Africa extrapolation
• Japan, France, Brazil, Spain, UK, USA

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Use for the BUV

• Two demand sources
• Mining industry
• Agricultural sector
• Commercial sub-sector
• Subsistence sub-sector
• SME confined by the lack of affordable
  transportation
  

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Trade Agreements

• Southern African Customs Union (SACU)
• Botswana, Lesotho, Namibia, Swaziland, and South
  Africa
  
• Common Market for Eastern and Southern Africa
  (COMESA)
  
• Southern Africa Development Community (SADC)
• Namibia/Zimbabwe Preferential Trade Agreement
• Generalized System of Preferences (GSP)

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Trade Regulations

• Harmonized System of Classification
• HS 87043180 for fully assembled vehicles
• HS 870899 Parts and accessories of motor
  vehicles, nesoi
  
• High import tariffs (e.g. 80 on automobiles)
• Imports from China or India General Imports (no
  duty rates reductions)
  
• Taxation on the BUV
• 20 CIF import duty
• 10 General Sales Tax

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Marketing

• Advertisement Promotion
• Small but very competitive advertising industry
• Two or three local companies operate under the
  auspices of international names
  
• The companies are very capable of rendering a
  complete advertising service
  
• Events management companies
• Printed media the most effective advertisement
  and promotion channel
  
• The Namibian

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Competition

• BUVs competitive advantages
• Used cars
• Limited number available
• Imports subject to 80 duty rates
• ATVs
• Sport ATV
• Utility ATV
• Youth ATV
• Small Utility Car

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ATVs

• Sport ATVs
• 4x4 transmission, powerful 650 cc engine
• 5,000 to 7,800
• Utility ATVs
• 2x4 or 4x4, smaller engines
• 2,200 to 5,000
• Bombardier Quest 90 4-Stroke, MSRP 2,189
• Youth ATVs
• 2x4, smaller size, 90 cc engine
• Bombardier DS 90, MSRP 1,775

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Small Utility Car

• Yamaha ProHauler 700 Auto (MSRP 4,500)
• Kawasaki MULE 550 (MSRP 5,700)
• High duty rates, no distribution chain

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BUVs Competitive View

• Used ATVs lose 20 of their value after one year
  and 10 each year after that
  
• Final price 2,500, plus distributors margin
• ATVs need a trailer for cargo
• BUV is multifunctional

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Licensing

• Mandatory requirements
• reverse gear
• left/right indicators
• stop lights and tail lights
• rear-view mirrors
• speedometer
• BUV already features a reverse manual gear
• Lights needed (an additional 100 cost)
• Intense lobbying showing the humanitarian intent
  of the BUV

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Trade Fairs

• Most of the cities organize trade fairs and shows
  (Windhoek and Ondangwa)
  
• Windhoek Industrial Agricultural Show (26 Sept
  4 Oct, 45th edition)
  
• Namibia, South Africa, Botswana, Zimbabwe, Ghana,
  Spain, Zambia, Indonesia
  
• 500 participation costs

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Sourcing

• China
• Long-term stability
• Relatively mature machinery manufacturing
  industry
  
• Lower costs due to cheap labor and resources
• Potential partners
• Guangdong Keda Dynamo-electric Co., Ltd
• Wuhan Zhenda Grain Machinery Co. Ltd.
• Chongqing ZongQ Motorcycle Co. Ltd
• Chongqing Charming Motorcycle Manufacture Co.
  Ltd
  

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Chinese Manufacturer Locations
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Chinese Facilities and Products
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Guangdong Keda Dynamo-electric Co. Ltd

• Located in Shunde, Guangdong
• Publicly-traded company in SSE
• Outstanding RD capability
• Actively seeking for new projects
• Great interest in this particular project - BUV
• Sufficient capital and capability to develop
  sample and mass produce BUV

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Chongqing ZongQ Motorcycle Co.

• Located in Chongqing
• Privately-owned enterprise
• Major products motorcycles

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Requirements of potential partner

• The marketing plan of the BUV
• Detailed specification and blueprints
• Detailed cooperation plan or agreement

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Shipping

• Possible Chinese shipping facilities Guangdong,
  Wuhan, Chongqing
  
• Walvis Bay Port
• Namibia's largest commercial port
• receiving 1,000 vessel calls each year and
  handling about 2.5 million tons of cargo
  
• sheltered deepwater harbor, no delays are caused
  by bad weather
  
• Major freight forwarders and shippers (MACS,
  MAERSK, UNICORN, PO Neddloyd, Mitsui OSK)
  

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Pricing and Payment

• 3,000-4,000 per 40 container
• Insurance 0.3
• CIF unit price around 945 (based on 80 units per
  40 container)
  
• L/C required by the Chinese manufacturers

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Price Computation
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Distribution Agent

• Agent most economical method for market entry
• Atlantic Import Export, Grootfontein
• Contact Mr. Werner Burger
• Jamo's Import Export cc, Windhoek
• Contact Mr. Mohamed A. Saloojee
• Namchin Import Export Manufacturing Co (Pty)
  Ltd, Windhoek
  
• Contact Zhou Young

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Distribution Stocking Distributors

• Independent business which purchases products
  from the exporter for resale
  
• Industrial Commercial Vehicles (ICV)
• Managing Director Mr WS Hirst
• Bezêrs Trailer and Body Craft cc
• Mr John Bezuidenhout
• AGRA Co-operative Ltd

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AGRA

• Agricultural and industrial supplier with retail
  locations throughout Namibia, Botswana, South
  Africa, Angola
  
• Able to provide the assembly and after-sale
  service required
  
• 70 mil sales
• In Namibia 400 employees, 25 branches

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Agent/Distributor Selection Criteria

• Reputation with others, including suppliers,
  banks, forwarders, and customers
  
• Experience with similar product lines
• Financial strength, verified from recent
  financial statements
  
• Legal authorization to operate in destination
  countries
  
• Willingness to avoid handling competitors
  products (currently not an issue in Namibia)
  
• Willingness to invest in the marketing or
  product
  
• Willingness to accept a non-exclusive contract
• Technical and linguistic skills

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Distributors Responsibilities

• Prepare and execute national marketing plan
• Prepare market research
• Develop competitor information
• Pricing strategies
• Promotion of product
• Participate in trade shows
• After-sale service
• Maintain inventory
• Help in collections (agent)

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Next Steps for IAT

• Contact and apply for import license with
  Namibian Ministry of Trade and Industry
  
• Plan overall financial commitment
• Contact agent and distributor trade leads
• Contact Chinese manufacturers
• Contact bank for specifics on using a Letter of
  Credit
  
• Establish and begin production, arrange for
  shipment and insurance with freight forwarder
  
• Keep close contact with manufacturer and
  distributor/agent
  
• Keep careful records of all transactions,
  contracts, shipping information, and dates

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Conclusion

• Africa endemic poverty, poor infrastructure, and
  grave political instability
  
• Namibia offers the infrastructure, the stability,
  and the market participants who genuinely can
  benefit from the BUV