German Luxury Car Maker
Practice this intermediate market entry case interview question in the Auto Mobility sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
This is a classic market entry profitability case requiring candidates to estimate market size, calculate unit economics, and assess feasibility of a break-even target. The case tests structured problem-solving, arithmetic accuracy, and ability to identify and evaluate competitive risks. Candidates should proactively ask about market share estimation methods and consider Mercedes-Benz's potential competitive responses.
Our client is a German luxury car maker. They have come to us as they want to grow their business and are looking into selling their cars in Bangladesh.
The GDP growth in Bangladesh is 5% per year. Currently, the only luxury car sold in Bangladesh is Mercedes-Benz, and they have been in the market for the past 10 years.
The CEO wants to find out if the company enters the market, can they break even in three years?
Clarifying Information
- Mercedes-Benz imported and sold 10,000 cars in this market over the past 10 years, and has their own dealership in Bangladesh.
- There are 1,000 new luxury vehicle buyers each year.
- The average selling price of a luxury vehicle in Bangladesh is $100,000.
- Existing owners replace their car every 10 years.
- We will have a 30% market share each year (candidate should brainstorm how to estimate market share).
- Initial Investment: $7M.
- Manufacturing cost per car: $20K.
- Transportation: 120% of manufacturing cost.
- Customs/Taxes: 95% of manufacturing + transportation cost.
- SG&A: 12% of all above costs.