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.
IMCs production facilities are located at Port Bin Qasim Industrial Zone near Karachi in
an area measuring over 105 acres
Plant (Indus Motor Company Limited
Plot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi, Pakistan)
Karachi
Quetta
Larkana
Lahore
Faisalabad
Sargodha
Multan

Sialkot
Islamabad
Rawalpindi
Peshawar
Azad Kashmir
Dera Ismail Khan
Mardan

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

 BUSINESS FUNCTIONS
Automobile sector is one of the fastest growing sectors in Pakistan. It contributes
towards the nations 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 performance
Spacious
Central lock
Tracker
AC
Child lock
Internal 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

 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 operations
Diversified vendor sector
Transfer of technology
Development 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/year
Increased capacity to enable export of automobiles and auto parts by
significantly enhancing the industrys 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.

Toyotas 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.

5. POTENTIAL PRODUCT
Future 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.

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

2. BASIC PRODUCT
CAR

1. CORE PRODUCT
(NEEDS)

Transport (i.e. convenience and

mobility)

Product levels

MARKET STRUCTURE:
APPLICATION

Economy
segment

PRODUCTS

Mehran*,
Cuore

Small
low
segment
Cultus*

Small high
segment
Toyota
Corolla,
Honda City*,
Honda Civic*

Luxury
car
segment
Toyota
Camry,
Honda
Accord*

Pick-up
segment

4X4
segment

Hilux
Ravi*

Land
Cruiser

Dealership

Indus Motors Co.

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:
Past Growth

VOLUME

MARKET SEGMENT
Economical

Small low segment

Small high
segment
Luxury car
segment
Pick-up segment
4X4 segment

2005

2006

2007

2008

2009

Mehran

31165

35982

37007

35526

13421

Cuore

8592

7883

12776

12204

5852

Cultus

15591

21342

29880

27662

9181

Liana

5370

5964

2605

684

Toyota corolla
Honda civic
Honda city
TOYOTA
CAMRY
HILUX
Ravi
LAND
CRUISER

23002
12359
11714

30527
12274
16136

35762
5610
11848

33640
5813
8439

26760
4985
6482

21

43

17

54

3389
3310

2551
5418

52
10117

2001
11828

1534
12643

3520

5165

2125

4727

1616

Growth
P.A
42%
16%
31%
5%
19%
20%
28%
36%
13.88%
42.75%
56.5%

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

Projected Growth:

Volume

MARKET
SEGMENT
Mehran

2010

2011

2013

17797 19221 24026 28350

Cuore

1560

Cultus

14750 18069

Toyota corolla

2012

0
22677

Growth by 18% almost

Production ended by
CKD

28686

Growth by 25%

38270 44393 50164 60190

Growth by 20%

Liana

751

25

Honda civic

5850

6611

7636

8896

Honda city
TOYOTA CAMRY

6660
10

6860
16

7272
28

7708
87

HILUX

733

755

810

1000

Ravi
LAND CRUISER

Growth P.A

20792 24118 28700 32144

490
560
612
725

Production ended
Growth increased
22.5%
Increased 3% to 6%
Based on order
Growth increased by
11%
Growth increased 15%
Growth increased 14%

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
1794cc
Corolla-Gli
Corolla-Xli
Corolla XE
Corolla-2.0 D
Saloon
Corolla-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
companys profitability with respect to segment covered by our & other companies. We
have gather information of market share of companies from different sources and based

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
Economy
Mehran

1.Honda
2.Toyota
3.Suzuki
Toyota
share
Competitors
share
Gross
Total
Historical
Growth
Projection

Cuore

Overall

Small

High

Segment

Luxury

City

Civic

Corolla

Camry

18%

Pick up
Hilux

Ravi

4x4
(Jeep)
Land
Cruiser

23%

28%

70%

8%

12%

10%
15%

30%

21%
26%
23%
70%

Competitor extra market share

18%

88%
36.7%

22%

18%

Cos
Profitability

36%

17%
5.54%

30%
13.86%

1.5%

43%
35%
11%

15%

2.3%

56.5%

38%

14%

18%

1.9%

19%

Distribution structure: (2008 to 2012)

Company Name

Economy

For 2008 Year

Segment Small High

Mehran

Cuore

City/Civic
(each)

Segment
Corolla

Baleno/
Liana

Pickup
Segment
Hilux

4x4
Segment
Land
Cruiser

10

Total

Dealership

42

28

27

28

42

28

28

97

42%

28%

27%

28%

42%

28%

28%

56%

Economy

For 2010 Year

Segment Small High

Company Name

Mehran

Cuore

City/Civic
(each)

Corolla

Baleno/
Liana

Pickup
Segment
Hilux

4x4
Segment
Land
Cruiser

Dealership

45

32

30

32

45

32

32

107

45%

32%

30%

32%

45%

32%

32%

62%

Segment

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. Thats how total distribution network
shrinks from 62% to 56% in 2012. We have taken average of dealers %age in obtaining
total with respect to year

Company Name

Economy

For 2012 Year

Segment
Small High

Mehran

Cuore

City/Civic
(each)

Corolla

Pickup
Segment
Hilux

4x4
Segment
Land
Cruiser

Total

11

Total

Dealership

48

35

33

35

35

35

116

48%

35%

33%

35%

35%

35%

56%

Distributions share and companys 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 All Pakistan
mln
distribution
Toyota
Honda
Pak Suzuki

32
30
45

Hyundai
BMW

18
10
135

Companies
turnover share

competitors
turnover share

Outlet
Coverage

3.3%
2.5%

23.70%
22.20%
33.33%

3.125%

5.5%
10%

13.33%
7.40%
100%

Turnover Share = Cos Sales per Dealers/ Cos Sales by all Dealers
Outlet Coverage = Cos 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?
No

Indus Motors Co. Ltd

Products
CC

Cost
12

1
2
3
4
5
6

Coure
Cultus
Toyota corolla
Toyota Camry
Hilux
Land cruiser

800cc
1000cc
1300cc
2400cc
2800cc
3800cc

709000
897000
1269000
6299000
3140000
13000000

Atlas Honda
No
1
2

Products
Honda civic
Honda city

CC
1500cc
1300cc

Cost
1229000
1349000

Suzuki
No
1
2
3

Products
Mehran
Ravi
Liana

CC
800cc
800cc
1300cc

Cost
514000
489000
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 reliability
They want quality
They want low mileage
They want fuel efficiency
They 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?

13

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
Faces problem in gear box and clutch plate of Cuore
14

Opportunity:
Expansion to foreign markets particularly in less developed countries
Local companys expansion due to high consumer demand.
Cater to new market segments such as Small low segment i.e.1000cc1200cc 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

15

EXTERNAL
ANALYSIS

INTERNAL
ANALYSIS

OPPORTUNITY

STRENGTH

PROMISING OPPORTUNITIES

1. Expansion to foreign markets particularly in less developed countries

2. Local expansion due to high consumer demand.
3. Cater to new market segments such as 1000cc range with CNG.
OPPORTUNITY

WEAKNESS

Only opportunities after improvement

1. Environmental friendly vehicles.

2. Unable to meet the local demand
STRENGTHS

THREAT
Ability to resist

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.

16

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 its 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?
No
1
2
3
4

Indus Motors Co. Ltd

Products
CC
Coure
Cultus
Toyota corolla
Toyota Camry

800cc
1000cc
1300cc
2400cc

Cost
709000
897000
1269000
6299000

17

5
6

Hilux
Land cruiser

2800cc
3800cc

3140000
13000000

Atlas Honda
No
1
2

Products
Honda civic
Honda city

CC
1500cc
1300cc

Cost
1229000
1349000

Suzuki
No
1
2
3

Products
Mehran
Ravi
Liana

CC
800cc
800cc
1300cc

Cost
514000
489000
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 reliability
They want quality
They want low mileage
They want fuel efficiency
They 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
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.

18

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
customers base and brand loyalty. Its spare parts are charging reasonable to buy.
Its 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:
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.
19

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 companys 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
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

20

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 margins
The current trend of profit margins of Toyota 5.53% whereas Honda has 2.21% and
Suzuki has 2.23%.

Toyota

Honda

Pak
Suzuki

This analysis shows that company earned 2.25 % on its sales. Honda and Mitsubishis
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
Companys 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
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

21

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
-46%).
Image and reputation with customers

22

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 Companys 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
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.

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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. IMCs
perception is that quality is the key to attract & retain the customers 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 companys 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 cars 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.
Service

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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 development
Technology 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
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
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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 its 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 its 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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