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Toyota Motor Introduction

Toyota Motor Corporation is one of the worlds leading

automakers, offering a full range of models, from minivehicles to large trucks. Global sales of its Toyota and

Lexus brands, combined with those of Daihatsu and Hino,

totaled 6.78 million units in CY2003*. Besides its own 12

plants and 11 manufacturing subsidiaries and affiliates in

Japan, Toyota has 45 manufacturing companies in 26

countries/locations, which produce Lexus- and Toyota-

brand vehicles and components. As of March 2003, Toyota

employs 264,000 people worldwide (on a consolidatedbasis), and markets vehicles in more than 140 countries.

Automotive business, including sales finance, accounts for

more than 90% of the company's total sales, which came to

a consolidated 16.05 trillion in the fiscal year to March

2003. Diversified operations include telecommunications,

prefabricated housing and leisure boats.

American Samoa India Saipan

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America Europe Africa Asia

http://www.toyota-southpacific.com/asamoa/http://www.toyotabharat.com/http://www.microlsaipan.com/http://www.toyota-southpacific.com/asamoa/http://www.toyota.co.jp/index.htmlhttp://www.toyotabharat.com/http://www.microlsaipan.com/

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Australia Indonesia SamoaBahrain Israel SaudiArabia

Brunei DarussalamSingaporeChina Kiribati SolomonIslandsFiji Kuwait Sri LankaGuam Malaysia TahitiHong Kong, China Nepal

Taiwan

New Caledonia ThailandNew Zealand TongaOman United Arab

EmiratesPakistan Vanuatu

Papua New Guinea VietNam

Philippines

Toyota International Portfolio

Passenger

Avalon Camry Corolla Avensis

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http://www.toyota.com.au/http://www.toyota.astra.co.id/http://www.toyota-southpacific.com/samoa/http://www.toyota.com.bh/http://www.toyota.co.il/http://www.toyota.com.sa/http://www.toyota.com.sa/http://www.nbt-brunei.com/http://www.toyotasingapore.com.sg/http://www.toyota.com.cn/http://www.toyota-southpacific.com/kiribati/http://www.toyota-southpacific.com/si/http://www.toyota-southpacific.com/si/http://www.toyota-southpacific.com/fiji/http://www.alsayeronline.com/http://www.toyota.lk/http://www.akguam.com/http://www.toyota.com.my/http://www.toyota-southpacific.com/tahiti/http://www.toyota.com.hk/toyota/index.htmhttp://www.toyota.com.np/http://www.toyota.com.tw/http://www.toyota-southpacific.com/nc/http://www.toyota.co.th/http://www.toyota.co.nz/http://www.toyota-southpacific.com/tonga/http://www.toyotaoman.com/http://www.toyotauae.com/international/http://www.toyotauae.com/international/http://www.toyota-indus.com/http://www.toyota-southpacific.com/vanuatu/http://www.toyota-southpacific.com/png/http://www.toyotavn.com.vn/http://www.toyotavn.com.vn/http://www.toyota.com.ph/http://www.toyota.com.au/http://www.toyota.astra.co.id/http://www.toyota-southpacific.com/samoa/http://www.toyota.com.bh/http://www.toyota.co.il/http://www.toyota.com.sa/http://www.toyota.com.sa/http://www.nbt-brunei.com/http://www.toyotasingapore.com.sg/http://www.toyota.com.cn/http://www.toyota-southpacific.com/kiribati/http://www.toyota-southpacific.com/si/http://www.toyota-southpacific.com/si/http://www.toyota-southpacific.com/fiji/http://www.alsayeronline.com/http://www.toyota.lk/http://www.akguam.com/http://www.toyota.com.my/http://www.toyota-southpacific.com/tahiti/http://www.toyota.com.hk/toyota/index.htmhttp://www.toyota.com.np/http://www.toyota.com.tw/http://www.toyota-southpacific.com/nc/http://www.toyota.co.th/http://www.toyota.co.nz/http://www.toyota-southpacific.com/tonga/http://www.toyotaoman.com/http://www.toyotauae.com/international/http://www.toyotauae.com/international/http://www.toyota-indus.com/http://www.toyota-southpacific.com/vanuatu/http://www.toyota-southpacific.com/png/http://www.toyotavn.com.vn/http://www.toyotavn.com.vn/http://www.toyota.com.ph/

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Tarago Prius Echo

Sports

MR2 Camry Sportivo Corolla Sportivo

Celica

4 W/D

Rav 4 LandCruiser Prado LandCruiser 100Kluger

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Commercial

LandCruiser 78 Hiace Coaster Hilux

Town Ace

Toyota In Pakistan

Indus Motors

Indus Motor Company (IMC) is a joint venture between the

House of Habib , Toyota Motor Corporation Japan (TMC) ,

and Toyota Tsusho Corporation Japan (TTC) forassembling, progressive manufacturing and marketing of

Toyota vehicles in Pakistan since July 01, 1990. IMC is

engaged in sole distributorship of Toyota and Daihatsu

Motor Company Ltd. vehicles in Pakistan through its

dealership network.

The company was incorporated in Pakistan as a publiclimited company in December 1989 and started commercial

production in May 1993. The shares of company are quoted

on the stock exchanges of Pakistan. Toyota Motor

Corporation and Toyota Tsusho Corporation have 25 %

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stake in the company equity. The majority shareholder is

the House of Habib with 50 % of the equity.

IMC's production facilities are located at Port Bin Qasim

Industrial Zone near Karachi in an area measuring over 105acres.

Indus Motor company's plant is the only manufacturing site

in the world where both Toyota and Daihatsu brands are

being manufactured.

Heavy investment was made to build its production

facilities based on state of art technologies. To ensure

highest level of productivity world-renowned Toyota

Production Systems are implemented.

IMC's Product line includes 6 variants of the newly

introduced Toyota Corolla, Toyota Hilux Single Cabin 4x2and 2 versions of Daihatsu Cuore.

Quality Policy

WE AS A TEAM AT INDUS MOTOR ARE

COMMITTED TO FOCUS ALL OUR ACTIVITIES

LEADING TO:

MANUFACTURING HIGH QUALITY PRODUCTS.

CUSTOMER SATISFACTION.

SERVICE TO SOCIETY.

MAINTAIN MARKET LEADERSHIP.

Environmental Policy

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WE AS A TEAM AT INDUS MOTOR ARE

COMMITTED TO CONTINUOUSLY IMPROVE OUR

ENVIRONMENTAL MANAGEMENT SYSTEM TO:

IDENTIFY AND AVOID/MITIGATE THOSEENVIRONMENTAL ASPECTS WHICH HAVE

NEGATIVE ENVIRONMENTAL IMPACTS.

COMPLY WITH ALL APPLICABLE LEGAL,

REGULATORY AND OTHER REQUIREMENTS.

ASSIST SOCIETY BY MAKING THE

ENVIRONMENT MORE FRIENDLY.

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Marketing

A social and managerial process whereby individual

and groups obtain what they need and want through

creating and exchanging products and values withothers. Marketing starts long before the company had

a product. Marketing continues throughout the product

life trying to find new customers and satisfying the

current customers by improving products appeal and

performance, learning from product sales results, and

managing repeat performance.

In case of Toyota producing the automobile industrymanufacturing the cars for the Pakistan market for the

last many years, with the consideration of needs,

wants and demands from the customers.

Today every human being need a car in order to fulfill

the need of transportation. But this need varies in

different terms. Some of the customers buy a car inorder to fulfill the basic need of traveling while some

customers buy a car in order to fulfill the social need,

or may be some other buy a new car for the status

symbol. So this different types of buying of consumers

reflects what customer actual needs, and what he want

and what he demands.

Toyota in Pakistan study the customer need in depth to

actually

understand what the majority of customers demands.

Toyota according to the different segments

manufacture the different products

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OBJECTIVES OF THE COMPANY

To be the market leader and satisfy the requirements of

its customers, the company has set certain objectives.These are:

1. Improve Quality

2. Enhance Efficiency

3. Minimize Cost

4. Increase Productivity

Over the previous years, the company has put in its bestefforts to manufacture quality cars designed for its

customers. To improve their efficiency, the company

gives great importance to its human resource as the

company believes that satisfied and quality conscious

team can produced quality products.

The company is using the philosophy of Kaizen forcontinuous improvement. It has become a way of life for

the management of the company by doing these efforts

towards their objectives.

Indus Motor Business Portfolio

BUSINESS PORTFOLIO:

The collection of businesses and products that makeup thecompany.

Business portfolio of Indus motors includes

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Corolla

HiLux

Cuore

CBU Unit (completely built up unit)

Corolla, HiLux and cuore are manufacturing in Pakistan,

65% of the car manufactured in Pakistan which includesbody and other parts except the engine which is being

imported from Japan Known as CKD (completely knocked

down) Engine.

Portfolio Analysis:

A tool by which management identifies and evaluates

the various businesses that makes up the company.

Techniques or Tools for the Portfolio Analysis:

There are two different techniques used for the portfolio

analysis:

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Boston Consulting Group Matrix BCG

Approach

General Electric Matrix GE Approach

TheBoston Consulting Group Matrix (BCG Matrix) is

the best-known portfolio planning framework. The GE /

McKinsey Matrix is a later and more advanced form of the

BCG. Matrix

BCG matrix is a tool that can be used to determine what

priorities should be given in the product portfolio of a

business unit.

The GE / General Electric / McKinsey matrix is a model

to perform a business portfolio analysis on the Strategic

Business Units of a corporation.

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TOYOTA COROLLA BCG MATRIX

STAR2.0D

2.0D Saloon

CASH COWSSE Saloon

GLi

QUESTION

MARK

Xli 1.3

DOGS

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The McKinsey / General Electric Matrix

The GE / McKinsey Matrix is more sophisticated than the BCGMatrix in three aspects:

1. Market (Industry) attractiveness replaces market growth

as the dimension of industry attractiveness. Market Attractiveness

includes a broader range of factors other than just the market

growth rate that can determine the attractiveness of an industry /

market. Compare also: Porter's Five Competitive Forces model

2. Competitive strength replaces market share as the

dimension by which the competitive position of each SBU is

assessed. Competitive strength likewise includes a broader range

of factors other than just the market share that can determine the

competitive strength of a Strategic Business Unit.

3. Finally the GE / McKinsey Matrix works with a 3*3 grid,while the BCG Matrix has only 2*2. This also allows for more

sophistication.

Typical factors that affect

Market Attractiveness:

- Market size

- Market growth rate

- Market profitability

- Pricing trends

- Competitive intensity / rivalry

Typical factors that affect

Competitive Strength of a

Strategic Business Unit:

- Strength of assets and

competencies

- Relative brand strength

- Market share

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- Overall risk of returns in theindustry

- Opportunity to differentiate

products and services

- Demand variability

- Segmentation

- Distribution structure

- Market share growth

- Customer loyalty

- Relative cost position (cost

structure compared withcompetitors)

- Relative profit margins

(compared to competitors)

- Distribution strength and

production capacity

- Record of technological or other

innovation

- Access to financial and otherinvestment resources

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GROWTH STRATEGIES

MARKET PENETRATION

PRODUCT DEVELOPMENT

MICRO AND MACRO ENVIRONMENTS

Macro Environment

The larger societal forces that affect the

microenvironment- demographic, economic, natural,

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technological, political, and cultural forces. These factors

represent constraints within which all organizations

including the automobile industry must function. The

various components of general environment are:1. Political

2. Economic

3. Demographics

4. Cultural

5. Technological

1. Political Factors

Government at all levels is an important component ofthe general environment no organization or industry is

immune from the various decisions made by the

government. The Pakistan, Governments in consistent

policies, frequent change in duty tariff and smuggling are

main reasons of unstable market conduction. Like other

motor companies Toyota is also affected by the current

changing policies of the government.

Previously the automobile industry had to cope with

more than 77000 yellow cabs that were imported during

the yellow cabs scheme and was later turned lose to the

market after a change of government and the policy

scrapped.

In 1995, all the previous taxes and duties were rolled into

one import duty of 30 percent on CKD kits as well as

CBU vehicles. In 1996 the sales tax on CBU was

increased cost to 18 percent. In 1997 the ministry of

industries and production recommended that duty on

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CKD be reduced form 40 percent to 35 percent while the

car sales should be exempted from CVT and the deletion

programme should be accelerated.

Just a few days back the general sales tax has been

increased to 15 percent promoting more price like. So

there is going to be a Rs.20000 increase in vehicles.

2. Economic Forces

Government economic policies at the federal level

clearly influence the ability of the industries to survive

and progress. Inflation is a major economic factor whichhas affected the Pakistan. Automobile industry including

Toyota. The current inflation rate is 21% to 23%

annually prices in the auto market were deregulated in

2000 and grew almost 20 percent to 30 percent per

annum to allow Toyota to bring their prices to profitable

levels. After three years of Still Market, the market

picked up.The recent increase of 15 percent sale tax is however,

going to result in a price increase.

3. Demographics Forces

Society holds a global or summary belief that an

organization is proper and worthy of support. Toyota

takes pride in being the most trusted name all over

Pakistan. Its vehicles are regarded as a status symbol. It

is the guiding principles of Toyota which has strongly

developed trust in the people.

4. Cultural Factors

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Toyota respects the culture and customs of every nation

and community and contributes to the economic and

social development through corporate activities in the

communities. Toyota believes in honouring the languageand spirit of the law of every nation and undertake open

and fair corporate activities to be a good corporate

citizen of the world. This is the reason that Toyota is

proud of the fact that Pakistani society considers Toyota

vehicles to be a symbol of reliability, comfort, luxury

and a have to be trusted.

5. Technological ForcesTechnology is of particular importance because it has

been and continues to be the main source of increases in

productivity. Despite changes in the means used to

motivate people and the variety of incentives that have

been offered to stimulated production, the resulting

increase has been negligible when compared to that of

created by technology.

The locally produced Toyota Corolla introduced in

May 1993 is now in its 11th year. Its excellent quality,

low maintenance cost and high resale value has won it

the support and loyalty of its customers. Product

diversification and a wide range of colours has

allowed customers to exercise greater options and has

sustained this threat. The total companys product

range comprises of 8 variants of Corolla and 5 variants

Hilux. As a result of the Safety First commitment;

for the first time in Pakistan SRS Secondary Restrain

System Airbags have been introduced in the GLI

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Automatic and GLI manual models, side impact bars

which protect vehicles for side collisions have

however been routinely fitted in all Corolla variants

since inception. The process of making a car moredurable includes Pitospaate Primer, total immersion

in a catholic Electro-deposit primer, which assures

long term anti corrosion and an extra thick colour coat

that is better than all others, ensuring that New Car

look New for years to come.

MICRO ENVIRONMENT

The Micro environment consists of those components of

the macro environment which are directly relevant to an

individuals organization. An organizations micro

environment includes1. Customers

2. Suppliers

3. Internal Public

4. Competitors

5. Intermediaries

The boundary between an organizations Macro and

Micro environment should not be viewed as static.

Changes in the former will inevitably redefine the latter.

The various components of micro environment for

Toyota have direct influence on its performance.

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Moreover components of Toyotas micro environment

are also related to its macro environment.

1. CUSTOMERSToyota aims at developing loyal customers relationship.

For this reappoint tries its best to understand who its

buyers are and what are their needs. It tries to listen to its

customers, realizing that they may be their best

collaborators. Customers feedback drive their product

development.

To be the market leader and satisfy the requirementsof its customers, the company has set certain

objectives. These are

a) Improve Quality

b) Enhance Efficiency

c) Minimize Cost

d) Increase Productivity

Over the previous years the company has put in its best

efforts to manufacture quality cars designed for its

customers. In Pakistan, more and more people want to

experience the unique pleasure of motoring. Exhaustive,

in-depth research and consumer surveys conducted over

the past years revealed trends of customers and the

environmental factors relating to use.

Toyotas Marketing Policy

Toyotas slogan Reliability n Motion represents its

emphasis son strong trustworthy and life-long

automobiles. It has many brand loyal customers and is

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considered as market leader. In Pakistan, it has aimed at

various segments with their variety of models in Toyota

Corolla, so customers in every segments can be satisfied.

Different classes of Toyota Corolla introduced in

Pakistan are;

Model Description Segments

SE Saloon 1600 cc Industrialists, Well established

Businessman, Professionals.

GLi 1300cc Businessman, Top Level Mgt. of multinationals, Professionals,

Government High Officials.

Xli 1300cc Middle-level Executives,

Government Departments &

Organizations, Professionals, Armed

Forces.

2.0D / 2.0D Saloon Professionals, Business Executives

who are fuel cost conscious.

Toyota has got an effective Nationwide dealer network

comprising of 25 dealers at Karachi, Lahore, Faisalabad,

Mirpur, Islamabad, Peshawar, Sialkot, DI Khan, Multan,

Quetta and Larkana. This spread of network shows not

how Toyota is sincerely busy in developing a companys

customer relationship and winning the hearts of brandloyal as well as attracting potential customers.

2. SUPPLIERS

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Suppliers constitute a second component in a typical

organizations micro environment. Toyota has to respond

not only to the customers they supply, but also to the

sources from which they receive supplies. Suppliers aregiven importance and respect by Toyota. It continuously

aims at developing a strong relationship with its

suppliers. This is done to ensure that Toyota suppliers

provide quality materials which is the most important

factor for Toyota vehicles.

Japan, is the major supplier of CBU or completely

built up vehicles. Also CKD kits or completelyKnocked down Kits are supplied from Japan. CKD

kits mainly comprise of the engine of vehicles. The

vehicles which are assembled in Pakistan comprise

of 65% locally manufactured parts.

Toyota Indus aims for good relations with both the

local and foreign suppliers. To achieve maximumlevel of customers satisfaction is Toyotas

mission. This can be proved by the fact that

dealership is authorized to these selective people

who offer 3 Ss. That is sales, services, spare parts.

This is done to ensure convenience for its

customers. They are offering the following services

to cater to the needs of their customers:

a) One year free servicing from any Toyota

service center all over Pakistan.

b) Free checkup camps are set annually.

c) Spare parts easily available all over Pakistan.

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d) The dealership network comprises of seventeen

dealerships all offering sales, services and

spares.

e) The customer retention department at thedealerships is also improved and consolidated

periodically.

The company believes on the fact that favorable supplier

relations lead to improve quality, better shipping

arrangements early warming of major price changes and

advance information about technological or marketplace

developments. So, the aim is to develop friendly,professional relations with suppliers in which both will

profit.

3. Internal Public

It is the action, of employees by which a companys

objectives are accomplished. In order to achieve its goals

and objectives Toyota makes sure that highly competentand skilled people are employed. Emphases is laid to

ensure that the person being hired meet the criterion for

the respective departments.

Training is an integral part in Toyotas various

departments. Training was intensified and various

courses were conducted through the previous year.

Technicians at the dealers service departments

underwent extensive by IMC service departments to

improve their skills. Moreover, periodic training of

managers is also conducted. This include training

camps, short course conducted in various well-

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known universities, training programs conducted

abroad and lectures of foreign exports.

4. COMPETITORSMarket competition is the cornerstone of managerial

capitalism. The five forces that shape the degree of

market competition operating within an organizations

micro environment are

a) Rivalry among existing organization.

b) Relative power of customers.

c) Relative power of suppliers.

d) Threat of new entrants.e) Threat of new substitutes.

Presently Toyota is proud to have the most market

share. Honda stands second followed by Suzuki and

Nissan. Since its start it was only in 95-96 that

Honda managed to sale 200 more units of vehicles

than Toyota. Still, Toyota is proud to be in a strong position. However to the spirit of competition is

strong and this has lead Toyota to continuously try

to improve itself, at all levels. Continuous emphasis

is laid on to attract more customers, maintains

healthy relations with its suppliers and makes efforts

to improve technology. Careful strategic planning at

al levels has enabled Toyota to achieve the highest

market share and have an edge over other

automobile companies.

5. Intermediaries

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Banks, Leasing companies and car agents are some of

the intermediaries for Toyota. These intermediaries

basically giving the boost to the sales of Toyota, by

offering the cars to the consumers, in easy installments andmaking the cars affordable for the customers to the higher

extent.

Marketing Research

Primary research

Survey Research

SACB (Sales Activity Control Board)

Experimental Research

Experimental Drive of HiLux

Experiments on SRS Bag for safety

purposes

Research Instruments

Questionnaires

Secondary Research

SWOT ANALYSIS

In formulating sound strategic plans, an organization

must assess its internal strengths and weaknesses inrelation to the external opportunities and threats it faces.

An effective strategy will take advantage of an

organizations strengths and opportunities at the same

time it minimizes or overcomes weaknesses and threats.

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Regular assessment and SWOT analysis is thus given

importance.

STRENGTHS1. Toyota has become the generic name in the Pakistan

market. Whenever the company launches the new

car in the market it has always the great support of

the already market orientation so the car introduced

by it easily covers the introduction stage. People

have a lot of trust for their name and this is why

Toyota is the leader in automobile industry.

2. Toyota has a great strength for its 2.OD car, Toyotais the hot selling diesel engine car in Pakistan and is

the only company offering the diesel engine in this

category of cars.

3. The important edge over the company editors are the

ample availability of the spare parts in the markets.

The price of spare parts is comparatively low andavailability all over the country has proved to be

beneficial for the company.

4. Toyota is a financially strong company. This can be

seen by analysis of the financial reports of the

previous years.

5. Toyota vehicles have got a much stronger resale

value than other car in Pakistan. This is why people

prefer to buy a Toyota.

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6. Toyota vehicles are made according to the Pakistani

environment. No doubt the other cars are available

but Toyota has an edge because it has learnt various

conditions of the Pakistan environment and people.So new additions and changes are proving to be

successful.

7. Toyota has an edge over others because it is the only

automobile company in Pakistan, while offers many

variants of its vehicles. Also Toyota offered many

variants of colors.

8. Toyota is proud to have a successful team of

competent managers and skilled workers. Extensive

training have enabled the employees to perform

outstandingly.

9. Toyota is the only company having the most

sophisticated network of dealerships wherecustomers are treated by professional dealers. There

are seventeen dealers in Pakistan where sales,

service and spare parts are offered, leading to

convenience for the customers.

WEAKNESSES

1. There is some weakness in the case of ergonomic

interior of Toyota corolla as well. The power

steering is not speed sensitive and the air

conditioning system in severe heat is in-effective.

Interior dimensions are less and heavy body and

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small engine sometimes create problems in hilly

areas.

2. There are some weaknesses in the dealershipnetwork. The dealers sometimes tend to deviate

from the recommended course of action and

principles of Toyota. This results in customers

complaints sometimes.

3. The company is besieged with internal operating

problems which are not very serious. Because of

dependency on Toyotas principles delivery of carsis done after 4-6 months. This is because CKD kits

are ordered four months before and once they arrive

from Japan, assembly and delivery takes some more

time.

4. A lot of effort is pull into the sales forecasting

because of the changing political and economicscenarios. For this reasons inventory has to be kept

low.

5. The company feels that one weakness is the

changing policies of the government and also the

30% cash L/c margin. This has lead to an adverse

environment.

OPPORTUNITIES

1. Export is a major opportunity for Toyota Indus

Motors. Vehicles were exported to Bangladesh just

once in order to prove the plant capacity and

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efficiency of the company. This should be started

again.

2. The contract with the government departments e.g.

Motorway Police, Shaheen Force and the digniterieswhere corolla has an opportunity to deal with the

business markets along with dealing in consumer

markets.

3. Toyota can do better by focusing on segments much

more than presently being done.

4. Toyota should also try to lower its price of Corollain the segment where Honda city has penetrated.

5. It can offer discounts to Government departments

and large organizations on purchase of its vehicles

in more quantities.

6. Success of the manufacturing of Daihatsu coure is amajor opportunity for Toyota to excel further careful

planning and the right time to launch the new car

can prove to be a success.

THREATS

1. Even though Toyota enjoys the position of being the

no.1 automobile company, still it faces some threat

from competitors especially Honda. Honda has

adopted aggressive strategies for capturing the

market.

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2. Even though Toyota keeps a careful eye on the

changing trends, still the changing customer needs

and trends can prove to be a threat.

3. A major threat is the changing political and

economic scenarios of Pakistan. Changing

government policies affect the companys

performance. Devaluation of rupee adverse shifts in

foreign exchange rates, trade policies of

governments is a threat. Moreover the company is

threatened by the ongoing rate of 30% cash L/c

margin.

4. Import of re-conditioned cars is also considered as a

threat for the company.

5. The planned car manufacturing plants of Hyundai

and Daewoo can prove to be tough competition for

Toyota if they are successful.