Konoco Trucks, owner of the Ping and Pong brands, has been based in Belgium since its founding in 1916. But by 2021, only 17 per cent of the cars it sold were bought in Belgium. In recent years, China has become Konoco’s fastest-growing market, accounting for 14 per cent of Konoco’s global sales volume in 2021. India, Russia and eastern Europe have also become key markets. Despite rising sales revenues, Konoco was conscious that its profits were often severely eroded by changes in exchange rates. The company’s own calculations in its annual reports suggest that the negative effect of exchange rates totaled €1.1bn between 2005 and 2021.
Konoco did not want to pass on its exchange rate costs to consumers through price increases. Its rival TRONTRUCKS had done this at the end of the 2021s in the US and sales had plunged.
1- What approaches could Konoco take to manage its exposure to foreign exchange? Explain the implications of each approach for the Company.
3-If the company decided to transfer its production to foreign markets, what pros and cons would it have?
3- The CFO of Konoco wants to know the evolution of the euro / yen exchange rate since the appearance of the euro in 2001. In this sense, what has been the annual percentage change in the euro-yen exchange rate for each year since the introduction of the euro? Include some picture evolution. Use only official sources for this.
Formalities:
· Wordcount: Max one page per each question
· Cover, Table of Contents, References and Appendix are excluded of the total wordcount.
· Font: Arial 12,5 pts.
· Text alignment: Justified.
· The in-text References and the Bibliography have to be in Harvard’s citation style.
The post Konoco Trucks, owner of the Ping and Pong brands, has been based in Belgium sinc appeared first on Skilled Papers.