INTRODUCTION

Indus Toyota Industries has serving its customers since long time. Indus Toyota motor develops and manufactures automobiles and automobile-related products, such as vehicles, engines, car air-conditioning compressors, car electronics components and devices, and stamping dies.

THE EYES OF THE CUSTOMERS

"Concern beyond Cars"We are providing reliability, after sales service, better performance, safety and spacious. We know that the only way to meet the needs of the customer is by putting our self in the shoes of customers and asking our self what we need, what would make us happy.

REGIONS

Indus motors (Pakistan) started its business in Pakistan as a public limited company in December 1989. The shares of the company are quoted on the stock exchanges of Pakistan.IMC’s production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres

Plant (Indus Motor Company LimitedPlot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi, Pakistan)

KarachiQuettaLarkanaLahoreFaisalabadSargodhaMultan

Sialkot IslamabadRawalpindiPeshawarAzad KashmirDera Ismail KhanMardan

Core values

Based on five pillars

Respect for People. Safe and friendly environment for all. Best work practices based on Ethics and Integrity. Teamwork. Honesty is the best policy

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BUSINESS FUNCTIONS

Automobile sector is one of the fastest growing sectors in Pakistan. It contributes towards the nation’s economy in the form of Technology Transfer, Employment, Investment and much more. Toyota Indus designs, develops, manufactures, markets, and sells the world's motor vehicles. We are going with corolla a famous car of Toyota; consumer needs the following benefits from corolla

Better performanceSpaciousCentral lockTrackerAC Child lockInternal and external stylish design

CUSTOMERS

Toyota's are such great vehicles that every one is the user of Toyota or prefer to buy. Toyota vehicles based on quality, dependability, and reliability. Fuel economy, performance, and for safety and design.

TECHNOLOGIES

Just in Time spirit implies two opposing forces of providing fast and flexible response to customers, yet building efficient mechanisms and systems that are efficient and waste-free.

The concept is to provide the right product and information, at the right time, in the right amount, in the right manner, while maintaining high standards of efficiency and cost control.

CONSIDERATIONS

IMC is currently working in SBUs which are corolla, Hilux, Coure and Camry. We are going to analyze on Toyota Corolla. The variants of Corolla are:

Corolla-XLI Corolla XE Corolla Altis 1794cc Corolla-GLI Corolla-2.0 D Saloon Corolla-2.0 D

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VISION STATEMENT

“To attract and attain customers with high-value products and the most satisfying ownership experience around the world”

MISSION STATEMENT

“To be the most successful and respected car company around the globe”

Current policies

Mandatory deletion program which has brought the industry to current level and to

Expansion of auto assembly operationsDiversified vendor sectorTransfer of technologyDevelopment of indigenous industry

For future expansion based on international environment we need to move towards a tariff based system

BUSINESS OBJECTIVES:

To establish a globally competitive automobile industry in Pakistan by the year 2012, by increasing motorization level by enhancing the automobile production to 500,000 units/yearIncreased capacity to enable export of automobiles and auto parts by significantly enhancing the industry’s contribution to the economy.We will start a joint venture with House of Habib (HOH) in production and sales.In the future we plan to further advance the products and systems we have put into the practical use.Automotive safety is one of the factors that must be given top priority in car making. To this end, Toyota is working on R&D activities to produce vehicles that will perform at the highest level of safety and ensure comfortable driving under various conditions.Toyota’s history has been filled with challenges. Based on the Toyota earth charter, we are working to produce cars that are friendly to both people and the earth.

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Product levels

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5. POTENTIAL PRODUCTFuture product innovation and

featuring)Safety measures

4. AUGMENTED PRODUCT(Value added product and services)Good quality, comfort, after sales service, innovation, high resale value, low maintenance cost.

1. CORE PRODUCT (NEEDS)

Transport (i.e. convenience and mobility)

3. EXPECTED PRODUCTMore Mileage, Better Accelerator, More Reliability, Fuel Efficiency

2. BASIC PRODUCTCAR

MARKET STRUCTURE:

APPLICATION Economy segment

Small low

segment

Small high segment

Luxury car

segment

Pick-up segment

4X4 segment

PRODUCTS Mehran*,Cuore

Cultus* Toyota Corolla,Honda City*,Honda Civic*

Toyota Camry,Honda

Accord*

HiluxRavi*

Land Cruiser

Note: Segment of our representative company is in bold form, where as, segments of competitors in auto mobile Industry are written in Italic form with Star Sign (*)

MARKET SIZE:

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Indus Motors Co.

Dealership

Past Growth VOLUME

MARKET SEGMENT 2005 2006 2007 2008 2009Growth

P.A

Economical Mehran 31165 35982 37007 35526 1342142%

Cuore 8592 7883 12776 12204 585216%

Small low segment Cultus 15591 21342 29880 27662 918131%

Small high segment

Liana - 5370 5964 2605 6845%

Toyota corolla 23002 30527 35762 33640 26760 19%Honda civic 12359 12274 5610 5813 4985 20%Honda city 11714 16136 11848 8439 6482 28%

Luxury car segment

TOYOTA CAMRY

- 21 43 17 5436%

Pick-up segmentHILUX 3389 2551 52 2001 1534 13.88%

Ravi 3310 5418 10117 11828 12643 42.75%

4X4 segmentLAND

CRUISER3520 5165 2125 4727 1616

56.5%

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PROJECTED FUTURE GROWTH:

Assumptions:

Total new car market trend is expected to increase during period of 09-10 by 28%

IMC sales and market share is expected to grow with aggressive marketing, sales promotion, expansion of dealers and strong Customer relationship

Total used imported car market is projected to decrease by 43% due to Corolla and Hiace Imports manufacturing in Pakistan

Growth of Mehran is assumed to raise almost 18% P.A, Whereas production of Cuore is ended by CKD of Indus Motor Company

from 2011 Growth of Cultus is assumed to raise almost 25% P.A Growth of Toyota Corolla is assumed to raise almost 20% P.A Liana Production would be expecting to stop in Pakistan by Pak Suzuki in

2012 Growth of Honda Civic is assumed to raise almost 22.5% P.A Growth of Honda City is assumed to raise in less proportion around 3 to 6%

% P.A Growth of Toyota Camry is very unpredictable to say either rise or decrease

because it is order based and focusing on niche market demand Growth of Hilux is assumed to raise almost 11% P.A Growth of Ravi is assumed to raise almost 15% P.A Growth of Land Cruiser is assumed to raise almost 14% P.A

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Projected Growth: Volume

Product Life Cycle Stages:

We have selected SBU of Toyota corolla, and here we are interested to know that which product of corolla lies at which stage

Product Segments

Introduction Growth Maturity Decline

Corolla Altis 1794ccCorolla-GliCorolla-XliCorolla XECorolla-2.0 D SaloonCorolla-2.0 D

Competition/ segment matrix

We are analyzing here market attractiveness with respect to our competitors and segment wise in which we are interested to know historical growth, projected growth and company’s profitability with respect to segment covered by our & other companies. We have gather information of market share of companies from different sources and based

MARKET SEGMENT

2010 2011 2012 2013 Growth P.A

Mehran 17797 19221 24026 28350 Growth by 18% almost

Cuore 1560 0 0 0Production ended by

CKD

Cultus 14750 1806922677

28686 Growth by 25%

Toyota corolla38270 44393 50164 60190 Growth by 20%

Liana 751 25 0 0 Production ended

Honda civic 5850 6611 7636 8896Growth increased

22.5%Honda city 6660 6860 7272 7708 Increased 3% to 6%

TOYOTA CAMRY 10 16 28 87 Based on order

HILUX 733 755 810 1000Growth increased by

11%Ravi 20792 24118 28700 32144 Growth increased 15%

LAND CRUISER 490 560 612 725 Growth increased 14%

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on assumption that these three companies captured 88% market share overall of automobile sector in Pakistan and remaining shares are covered by rest of the companies.

Competition Segments Overall

Economy Small High Segment Luxury Pick up 4x4 (Jeep)

Mehran Cuore City Civic Corolla Camry Hilux Ravi Land Cruiser

1.Honda 18% 23% 21%2.Toyota 28% 70% 8% 12% 10% 26%3.Suzuki 30% 15% 23%Toyota share

70%

Competitorsshare

Competitor extra market share 18%

Gross Total 88%Historical Growth

36.7% 22% 36% 35%

43%56.5% 38%

Projection 18% 17% 30% 11% 15% 14% 18%

Co’s Profitability

5.54% 13.86% 1.5% 2.3% 1.9% 19%

Distribution structure: (2008 to 2012)

For 2008 YearEconomy Segment Small High Segment Pickup

Segment4x4 Segment

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Company Name Mehran Cuore City/Civic (each)

Corolla Baleno/ Liana

Hilux Land Cruiser

Total

Dealership 42 28 27 28 42 28 28 97

42% 28% 27% 28% 42% 28% 28% 56%

For 2010 YearEconomy Segment Small High Segment Pickup

Segment4x4 Segment

Company Name Mehran Cuore City/Civic (each)

Corolla Baleno/ Liana

Hilux Land Cruiser

Total

Dealership 45 32 30 32 45 32 32 107

45% 32% 30% 32% 45% 32% 32% 62%

The current dealers of Pak Suzuki are 45, current dealers of IMC are 32, and existing dealers of Honda are 30. It is expecting to increase dealership by these three companies till 2012, at least increased 3 to 5 dealers by each company.

Assumption: In 2012 year, we have gather information that SBU of Liana/Baleno will expected to stop production in Pakistan by Pak Suzuki so we have not shown here its dealers contribution in Distribution structure. That’s how total distribution network shrinks from 62% to 56% in 2012. We have taken average of dealer’s %age in obtaining total with respect to year

For 2012 YearEconomy Segment Small High Pickup

Segment4x4 Segment

Company Name Mehran Cuore City/Civic (each)

Corolla Hilux Land Cruiser

Total

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Dealership 48 35 33 35 35 35 116

48% 35% 33% 35% 35% 35% 56%

Distributions share and company’s positions (2008)

All figures of Sales per dealers are taken basis on assumption and certain idea given by one of dealers to us.

% of rs mln

All Pakistan distribution

Companies turnover share

competitors turnover share

Outlet Coverage

Toyota 32 3.125% 23.70%Honda 30 3.3% 22.20%Pak Suzuki 45 2.5% 33.33%

Hyundai 18 5.5% 13.33%BMW 10 10% 7.40%

135 100%

Turnover Share = Co’s Sales per Dealers/∑ Co’s Sales by all Dealers

Outlet Coverage = ∑ Co’s Dealers / ∑ Dealership

Total Distribution of Automobile sector is around 135 in Pakistan bases on our estimation for selected companies. Companies turn over share is calculated basis on taking assumption of sales per dealers of Toyota i.e. approximately 40000 units sold in 2009-10 year and having 32 dealers overall.

Similarly, in 2009, Honda has 30 dealers in Pakistan, and its sales per dealer assumed i.e. 34000 units sold so its turn over share is calculated basis on same formula i.e. around 3.3% turn over share. Similarly Pak Suzuki are having 45 dealers in 2009-10, and its shares per dealer is assumed around 75000 units due to its massive production and large market share of multiple product range. Its turn over share is 2.5%.

Based on available information and certain assumption we have calculated outlet coverage of each dealership with respect to each company.

PRICE ANALYSIS

Are the companies price and cost are competitive?

Indus Motors Co. Ltd

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No Products CC Cost

1 Coure 800cc 7090002 Cultus 1000cc 8970003 Toyota corolla 1300cc 12690004 Toyota Camry 2400cc 62990005 Hilux 2800cc 31400006 Land cruiser 3800cc 13000000

Atlas HondaNo Products CC Cost

1 Honda civic 1500cc 12290002 Honda city 1300cc 1349000

SuzukiNo Products CC Cost

1 Mehran 800cc 5140002 Ravi 800cc 4890003 Liana 1300cc 1229000`

What do our customers wants?

As we are in the auto industry and every day is a new day because every thing inside and outside the organizations changes rapidly i.e. consumers preferences, technology, trend, culture and demand. So we are focusing on the following wants of the consumers.

They want reliabilityThey want qualityThey want low mileageThey want fuel efficiencyThey want innovation and new products.They want high resale value.They want safety installed in the cars

Do we really know that?

Yes we know that our customers want these facilities. We keep tracking and analyzing the needs and demand of our customers.

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Are we providing these facilities?

Yes we are providing these facilities because Indus motors have a large number of products and solutions in the automobile industry with the best people and best technology. We know how to make our customers delight and how to make long term relations with our customers. All the parts are easily available at economic prices, they have the benefit of fuel efficiency, we are known in the eyes of customers for reliability and best quality, Indus motors also provides the best resale value of their cars in the market which attracts the customers and so forth.

SWOT ANALYSIS:

SWOT analysis is an analytical tool that for understanding the strength and weakness of organizations and opportunities and threats. With a thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unaware.

Strength:

Loyalty from the customers Extensive research and development Highly customer focused cars Strong financial position High resale value Easy availability of spare parts Well established dealer network Enjoying 26 % market share Brand image in the mind of customers Brand loyalty of customers Toyota currently uses ultra high strength steel grades in 2009 model year

vehicles Diversified product range Positive work climate and organization culture After sales service

Weakness:

Low capacity of production with respect to Pak Suzuki Almost same shape of Toyota corolla available in 1300 cc and also in 1800cc;

1.8 Altis whereas the Honda & other competitors has different shape in its product range

Less safety measures provided in most of their brands Lack in ability to make parts locally, thus increased on imports

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Faces problem in gear box and clutch plate of Cuore

Opportunity:

Expansion to foreign markets particularly in less developed countries Local company’s expansion due to high consumer demand. Cater to new market segments such as Small low segment i.e.1000cc-

1200cc range Opportunity to introduce its Toyota corolla with CNG fitted Environmental friendly vehicles

Threat:

WTO (World trade Order) opening local markets for global competition

The rising price of the steel is the great threat to the sector; if Toyota copes up with this problem they can survive and retain its market position (their own steel plant).

Appreciation of yen and also devaluation of Pakistani currency with respect to Dollar currency

Higher the discount rate from state bank affects the sales of auto industries; they should finance cars by setting their own financings. (x mart introduce their own bank to finance the banks)

Toyota Faces stiff competition with firstly Honda and Pak Suzuki Narrowing industry margins

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PROMISING OPPORTUNITIES

1. Expansion to foreign markets particularly in less developed countries2. Local expansion due to high consumer demand.3. Cater to new market segments such as 1000cc range with CNG.

Only opportunities after improvement

1. Environmental friendly vehicles.2. Unable to meet the local demand

Ability to resist

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OPPORTUNITY STRENGTH

EXTERNAL ANALYSIS

INTERNAL ANALYSIS

OPPORTUNITY WEAKNESS

THREATSTRENGTHS

1. The rising price of the steel is the great threat to the sector, if Toyota copes up with this problem they can exist in the market (their own steel plant).

2. Appreciation of yen also the threat.3. Higher the discount rate from state bank affects the sales of auto

industries; they should finance cars by setting their own financings. (X MART INTRODUCE THEIR OWN BANK TO FINANCE THE BANKS)

INTENDED BUSINESS:

The Toyota corolla is generally designed for the upper and upper middle level customers. In future, there is a need to flourish the production of the cars for the upcoming needs of middle and lower middle customers. Toyota is the name of durability, safety and comfort. So it is the demand of every citizen. It is the ideal vehicle according to the roads in the city and customers think that it is most reliable vehicle for them nowadays and for future prospects Toyota should launch new corolla with affordable features for the middle and lower middle customers to beat their competitors those are launching 1300cc cars in low prices.IMC is interested to cater the need of economy segment in future.

RELATIONS WITH OTHER BUSINESSES:

Although the market share of Toyota is the largest in the industry. The main competitors of it are Honda Atlas and Pak Suzuki. The products of them which have almost the same specifications are: Honda City and Suzuki Liana in 1300 cc. Suzuki say that it’s become a household name because they focus on the middle and upper middle class. Mehran and Alto are considered economical and popular among them. While Honda says it is a sign of impression, style and looks. “See it coming, like an arrow. Striking good looks, cutting-edge design, & focused oriented.”

PRICE ANALYSIS Are the companies price and cost are competitive?

Indus Motors Co. LtdNo Products CC Cost

1 Coure 800cc 709000

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2 Cultus 1000cc 8970003 Toyota corolla 1300cc 12690004 Toyota Camry 2400cc 62990005 Hilux 2800cc 31400006 Land cruiser 3800cc 13000000

Atlas HondaNo Products CC Cost

1 Honda civic 1500cc 12290002 Honda city 1300cc 1349000

SuzukiNo Products CC Cost

1 Mehran 800cc 5140002 Ravi 800cc 4890003 Liana 1300cc 1229000`

What do our customers wants?

As we are in the auto industry and every day is a new day because every thing inside and outside the organizations changes rapidly i.e. consumers preferences, technology, trend, culture and demand. So we are focusing on the following wants of the consumers.

They want reliabilityThey want qualityThey want low mileageThey want fuel efficiencyThey want innovation and new products.They want high resale value.They want safety installed in the cars

Do we really know that?

Yes we know that our customers want these facilities. We keep tracking and analyzing the needs and demand of our customers.

Are we providing these facilities?

Yes we are providing these facilities because Indus motors have a large number of products and solutions in the automobile industry with the best people and best technology. We know how to make our customers delight and how to make long term relations with our customers. All the parts are easily available at economic

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prices, they have the benefit of fuel efficiency, we are known in the eyes of customers for reliability and best quality, Indus motors also provides the best resale value of their cars in the market which attracts the customers and so forth.

CURRENT STRATEGY:

Synchronized dealership network setup, the innovative concept revolved around the “Toyota 3 S Dealership”.

Toyota always tries to grasp shifts in customer demands constantly checking for conformity with its standards and acting swiftly to resolve any discrepancies.

Collect information from customers through quality reports from dealers and questionnaires given to purchases of new cars and suppliers.

The main differentiating factors are the overall industry for Toyota cars is its customer’s base and brand loyalty. Its spare parts are charging reasonable to buy. It’s after sale service is improved efficiently with the passage of time.

Toyota Indus Motors Company spends a lot of amount on R&D, which is shown by their product development program.

IMC provides better customer service through adopting product differentiation strategy, improved product design and durability of its product.

For IMC, the vendor supplier to reduce their bargaining power. The vendors work at an established rate that only varies in prices whenever inflation takes place.

After sale service is a very important aspect of Toyota motors. Quality of product has not been comprised with and very heavy investment has

been made to build its production facilities based on state of art of technologies. IMC has installed capital intensive technology. They are using conveyer belts to

transfer a car during assembling from a station to another station. They have heat exchanger, spray booth, drying tower etc.

Toyota concept is purely depends upon Total Quality management (TQM)

DESCRIPTION:

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With the increase of the demand from customers for the passenger cars, the production capacity of Suzuki increases. Suzuki has an annual production capacity of 100,000 units in three shifts followed by Toyota with 33,000 units and Honda with 50,000 units in single shift. Suzuki was able to utilize over 72 per cent of its production capacity, Toyota 66 per cent, while Honda was able to utilize only 62 per cent of its total capacity.

The automobile industry facing the biggest threat i.e. increases of the steel prices which causes lower down the profit margin. Toyota increases their product prices with this increment.

Government of Pakistan withdrew the facility to bring cars from oversees under personal baggage, due to this the sales of locally assembled cars increases. This leads to increase in prices of Suzuki products up to 38 %.

Demand of passenger vehicles increased, which further lead to increase in sales and growth of Pak Suzuki, IMC and Atlas Honda products.

On their part the automobile producers blame the constant devaluation of local currency, the uncertain Rupee-Yen parity, increasing costs of production and the absence of economy of scale to benefit from the purchase of parts and raw materials needed in bulk quantity and at concessionary rates to reduce the prices. They also cite internal policies, discouraging the sales, resulting in massive under-utilization of capacity in the automobile industry.

Key Indicators of How Well the Strategy Is Working

Trend in sales and market share

The company’s unit sales increased from 29,595 units to a record 35,874 units, an increase if 26% and translated to a sales value of Rs. 27.6 billion as compared to Rs. 22.5

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billion during 2006-2007. We have seen increased in Toyota corolla segment by the passage of time except decline in 2008year due to devaluation of currency.

Acquiring and/or retaining customers

IMC has a mission to be delighting their customers and make best possibility of providing the range of products. IMC has embarked on the development of an Express Maintenance Program with the assistance of Toyota Motor Corporation, for both increased service capacity at our dealerships as well as enhanced convenience for our customers, based on Toyota Production System provides for prompt maintenance of vehicles and has strong customer appeal for speedy delivery of service vehicles with attention to quality detail. There is a strong emphasis on After Sales Service at IMC and its dealerships. In living up to this vision, we hope to achieve our long-term goal of becoming # 1 in Customer Satisfaction in Pakistan by implementing Customer Relationship strategies and policies that will motivate our CR staff to perform at increasingly higher standards. Our Complaint Handling Procedure provides clear guidelines on how to achieve quick resolution of customer complaints. Integration of every department at organization, among vendors and dealerships help to improve standard work and focus our approach to customer oriented that is how they are quickly resolving their key issues throughout the Company and our Dealer network to maximize customer satisfaction. That is a reason, Toyota has large customer base with good reputation. Trend in profit marginsThe current trend of profit margins of Toyota 5.53% whereas Honda has 2.21% and Suzuki has 2.23%.

This analysis shows that company earned 2.25 % on its sales. Honda and Mitsubishi’s earnings are also very close to each other.

Overall financial strength and credit ranking

There is no doubt that IMC has strong back up and having strong financial strength. The Company’s Return on Equity for the year was 42% (2004-05 of 33%), while the Earnings per Share rose 78% to Rs 33.70 and Shareholders Equity was up 40% to Rs 6.26 billion. A final payment of Rs 7 per share has been proposed to shareholders, making a total

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Pak Suzuki

Honda Toyota

payment for the year of Rs 12 per share, a 20% increase compared to the dividend payment in 2005. An amount of Rs 1,705.3 million is recommended for appropriation to the General Reserves that will be utilized for our continuing growth and capacity expansion. During last year, our total assets have risen by 21% to Rs 16 billion.

Efforts at continuous improvement activities

Toyota Indus motors doing continuous efforts for improvement and reducing complaints from customers. They invested large amount in R&D for getting feedback from customers by surveys and questionnaires through dealers.As part of on-going plant expansion, several other projects are also being implemented. These include:

A new Jig Shop for making jigs for future models, Extensions to our CKD Warehouse and CBU yard, Develop advanced Skill Training Centre to improve the work practices and

improve the standard of workforce Improving Total quality management system across the organization, vendors,

and dealers and also pay attention such activities introduce and improve friendly environment.

Trend in stock price and stockholder value

The company's book value has increased consistently over the years. Currently it stands at Rs 131 with a YoY increase of 9.1%. This increase is due to the high increase in reserves. Reserves have continued to increase while no new shares have been issued. This continuous increase has shown that the stockholders are well catered to and their share in the business has continued to increase. This also shows that the management is taking good care of the stockholders interests.

Earnings per share (EPS) for the company had also showed continuous increase from FY01 (2.59) to FY07 (34.93). Onwards, the EPS has continued to decrease due to decline profits.

Dividend per share had increased from FY03 (7) to FY07 (13); and since has decreased to 10 (FY09). This too has been due to the decreasing profits for the company.

The price to earnings ratio (P/E) has showed variance. It was 3.19 in FY02, from whence it decreased to 2.81 (FY03). Then onwards the P/E ratio increased to 8.68 in FY08, after which it decreased to 7.80 (FY09). The market price of the company's share was 14.65 (simple average) in FY02. The price then increased consistently till FY07 when it was 261.63 (simple average). It decreased to 253.03 in FY08, and then plunged down after the collapse of the stock market. At the end of FY09, the market price of the company's share was 107.72, while the average for FY09 became 137.37 (a YoY decrease of around -

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46%).

Image and reputation with customers

During the year, the Customer Relationship (CR) team focused on putting in place customer-friendly policies and procedures at IMC and its 3S dealerships to achieve quick turnaround on customer inquiries and complaints to maximize Customer Satisfaction.Our vision is to build effective CR, as per Toyota's CR Activity Ideals, is to create corporate trust based on integrity and fair handling of Inquiries and Complaints by:

● Opening a larger window for customers● Handling Inquiries and Complaints swiftly and surely● Making the "Voice of the Customer" the basis for corporate renewal, and●Improving our corporate image and educating customers to support Sales, and Service activities

Leadership role(s) – Technology, quality, innovation, e-commerce, etc.

For the first time in the history of IMC, M-Type Jig has been installed for Hilux production which is used in the weld shop for assembly of the main body.

KI-J activity has been initiated at IMC which involves hazards identification, visualization and fixing problems on a priority basis. It is to visualize and share weaknesses globally, by setting common targets voluntarily, considering capability and built-in-quality and achieving these targets through team work and cross functional support.

In order to achieve the desired targets results, training and awareness sessions were conducted to enhance the capabilities of our members in the areas of Quality, Safety and Standardized Work, as these areas ensure Built-in-Quality.

Toyota took part for the first time and excelled in the Asia Pacific Skill Contest at APGPC (Asia Pacific Global Production Centre), Thailand.

During the year, the Company started the environment friendly Co-generation Power Plant. This facility will help in reduction of carbon dioxide emissions through the use of natural gas to operate engines and turbines.

Are the Company’s Price & Cost Competitive?

Indus Motors Company has mission to provide quality vehicles by keeping in view customers preference. Toyota corolla achieved price-quality leadership overall in

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Pakistan. The have adopted reasonable pricing strategy as per its product range, whereas the renowned brand of IMC is Toyota corolla whose sales and growth are comparatively high than other portfolios. Honda Atlas is very crucial in the providing Quality product to customers. The perception behind that brand make as it talk itself and then customer will attain and will not as such consider price. Honda charged a bit higher price than IMC product ranges. IMC’s perception is that quality is the key to attract & retain the customer’s base; on the other hand, pricing strategy is also strong support to product and brands because it has directly impacts on sales volume of product portfolios. IMC consider its pricing strategy as secondary part of success achievement.

The value chain of Toyota Indus motors company

Primary activities

Inbound logistics

Here goods are received from a company’s suppliers. They are stored until they are needed on the production/ assembly line. Goods are moved around the organization. Toyota motors purchase their raw material from all around the world. In order to maximize their availability of raw material Toyota motors maintain good relationship with their suppliers. Toyota use JIT (just in time) approach for handling of raw material.

Operations

This is where goods are manufactured or assembled. Individual operations could include organizing the parts to make new cars and the final tune for a new car’s engine. Toyota motors are known for their reliability which comes from efficient operations.

Outbound logistics

The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final customers. Toyota motors make their product easily assessable.

Marketing and sales

In true customer oriented fashion, at this stage the Toyota motors prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix.

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Service

This includes all area of service such as final checking, after-sales service, complaints handling, training and so on. Toyota values their customers.

Support Activities

Procurement This function is responsible for all purchasing of goods, service and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. Toyota motors will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organizations), and e-purchasing (using IT and web-based technologies to achieve procurement aims).

Technology developmentTechnology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. Toyota motors implemented production technology, internet marketing activities, lean manufacturing, customer relationship management (crm) and many other technological developments.Human resource management (HRM)Employees are an expensive and vital resource. Toyota motors manage recruitment and selection, training and development, and rewards and remuneration. Toyota motors consider their employees as HUMAN CAPITAL. The mission and objectives of the Toyota motors is the driving force behind the HRM strategy. Toyota motors uses following techniques to retain their employees:

Recruitment Selection Training and development Compensation Maintenance

Firm infrastructure

This activity includes and is driven by corporate or strategic planning. Toyota motors implemented management information system (MIS), and other mechanisms for planning and control in different departments.

EXPECTED SUGGESTED STRATEGIES

BACKWARD INTEGRATION

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Steel price are going high and it may be cause of increasing cost of product and also create problem in availability of steel which is very key Raw Material of automobile industry. So, Toyota should adopt “Backward Integration Strategy” to overcome expected future problem. ( Toyota have a very good Balance Sheet).

FORWARD INTEGRATION

According to the available Data it reveals that in “Economy Segment” Coure have a strong competitor Mehran due to two reasons:

1) Low Price 2) Number of Dealers

Toyota has 32 dealers while Suzuki has 45 dealers. In this situation Toyota should adopt “Forward Integration” to take control of dealers and number of dealer should be increased.

COST LEADERSHIP STRATEGY

Suzuki says that it’s become a House hold name because they focus in the Middle and Upper Middle class. Mehran and Alto are considered economical and popular among them, although Coure is their to this class but it’s so expensive than Alto and Mehran. This segment has very potential to Increase the Sale Volume of Toyota. Mehran growth p.a. is 42% while coure just 16% question is why?

Toyota should adopt cost leadership strategy to focus Middle and Lower Middle class customer to beat their competitors in 800cc and 1000cc cars.

FINAL STRATEGY

According our assessment “Backward Strategy” is better for Toyota.

If Toyota adopt this Strategy than No change in Vision and Mission Statement.

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