Cnsr

EU Tvnrs

FlowerblauEl Inlemational Business Manager of EU tyres, a Fortune 500 company based in Belgium, manufacturing radial and closs ply tyres for ca$, was quite impressed with the dsing dematd for cars in Itrdia. EU already had a plant in China; Flowerblaum was now toying with the idea of starting its operations in India. Before going any fru0rer, he wantea to have a rough estimate of existing market for car tyres and future prospects so as to prepare a feasibility report. He would work further on the project and prepare a detailed project report. As he wanted an estimate quickly-within a week-he appointed a firm bdsed in India he knew since long-J P Synergy Consultants (JpSC)_to do the needful. ivtihir at JPSC \ias assigned the job. He loew tyre as a product was _ sold institutionally as well as through retail and that import of car tges was negligible. Purchasing done by car manufactwels represent the institutional sales. Tyres required by consumers for replacement of old tFes are sold by retailers. This sale is called retail sales. He was debating vitl.himself the mthid of forecasting that should be used considerinl the tirner.iraEe and the use of the forecast. He thought time constraini compels him to focus on desk research. He chose ,detrIalld for related goods', i.e., lhe car for the purpose. He started by mating a list of related secondary data sources like annual repons of car manufacturers. repofls of Automotive Componnts Manufacturers of India (ACMA) and So;iery of hdiatr Automobile Manufercturers (SIAM). Annual rcports of the car Da4ufacturers will give data pertaining to the actual sales of ca$ over years and their perceptions about the future. Reports of SIAM wil give the overall picture of the car industry and would be used to augment and also cross check $ith the data avaitable from the annual ieports of vadous car Eanufacturers. Reports of ACMA will pmvitle details on tyres. Additionaly, CMIE repofis may also be used for the purpose.

would mLrltipty the rolal number of cars by five ro ^".-1.-11,,: obtarn the rotal number of qres required by inslitutionaj .ute" ro..tirD"t. rne current demand. For furure demand for caIs. he would use lhe statistical technjque of moving average merhod lo come ,o to,nt O"**j or c:lls ror rhe next hve years. To this. he will again multiply by five l,o come to.forecasrs car tyres. As regards retaisale, h" ;;"i; ;"; ,h" -for aggregative data from which he will subtract institutionl aernini ti come to the figure of retail sales. These frgures Ue witl use for forecasting the demand for Dext Ilve vears. . He was wondering wberher there could be ano$er way instead of the above to cooe to an estimate of demand of tyres. Ue tnew ii was prudent practice to use at least one more method within t]rc of aest research for thi purpose of forecasting. He "r"u had a veryt o.t tL" oi t _J !o decide on both.

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QUESTIONS
1.

Was the. method chosen by Mihir the best one? Do you envisage any probleors in rhe merhod chosen by Mihir? How can rheie proDtems be ovetcome?

What additioDal method ot forcasting do you recoDmend? you have !o aqually work on il. get additioDal derails from olher
sources and choose the best one_