KGP

Commercial Due Diligence on a Powertrain Manufacturing Joint Venture

Sunday, September 13, 2015

Purpose

The client was proposing to invest in a new joint venture between major international vehicle groups to produce engines and transmissions in Russia. Due diligence was required to assess the technical and market-related risks facing the proposed JV.

Objectives

To provide a detailed risk assessment and recommendations concerning:

  • The JV partners’ objectives and strategies
  • Plant and equipment acquisition and the appropriateness of the production processes
  • Project management and timetable
  • Technology status of the products of the JV
  • International and local sourcing prospects for the JV
  • Pricing arrangements and the customer base for the products of the JV and the downstream market prospects for the principal customers
  • Potential market volatility caused by changes to government regulations for investment and foreign trade
  • Competitor analysis
  • The financial plan and its sensitivities
  • The JV agreement and its appendices

Outputs

A detailed risk analysis of the proposed JV, highlighting key risk areas, possible means of decreasing risk exposure as well as recommendations on the attractiveness of the proposed investment.

Get Back