Business Strategy of Automotive Company After Sales Costs Structure to Optimize Profitability (Case Study PT. XYZ TBK. in Banjarmasin, South Borneo, Indonesia)

Abstract

The Covid-19 pandemic affected PT. XYZ Tbk., specifically in Banjarmasin branch After Sales area. The overall gross profit increased compared to 2019 before pandemic hit which was 0,6%. However, in the After Sales area itself, there was a significant decline of -17,4% where the largest decline was in the body repair sector, which was -47,7%. PT. XYZ Tbk. must minimize the impact of the Covid-19 pandemic and continues to strive to grow in its performance. This study aims to formulate strategies for PT. XYZ Tbk. Banjarmasin branch to earn potential profits during and after the pandemic. The researchers use sensitivity analysis methods on feasibility studies to find the most impactful variable. Next, the researchers formulate an alternative financial and operational strategies for PT. XYZ Tbk. Banjarmasin branch. The sensitivity analysis found that changes in COGS and OPEX in cost structure had the greatest impact on overall profitability during this pandemic. In this study, the researchers compare the costs structures when only using COGS during the pandemic, OPEX during the pandemic, and when the two cost structures are combined and look at PT. XYZ Tbk. Banjarmasin branch projections for the next 5 years. Based on the results of the sensitivity analysis, PT. XYZ Tbk. Banjarmasin branch may choose to use a mixed composition between COGS and OPEX during the pandemic because it has a fairly large impact on the company's overall margin. From the projection results on the fifth year, the margins that will be obtained are 26.57% on Gross Profit, 19.26% on Operating Profit, and 19.83% on EBITDA. To ensure to get maximum results, the researchers support PT. XYZ Tbk. Banjarmasin branch with detailed operational strategies for each department in the After Sales area.

Keywords: automotive, business strategy, costs, covid-19, profitability

DOI: 10.7176/EJBM/14-2-07

Publication date: January 31^st 2022