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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 Limited


Plot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi, Pakistan)
Karachi Sialkot
Quetta Islamabad
Larkana Rawalpindi
Lahore Peshawar
Faisalabad Azad Kashmir
Sargodha Dera Ismail Khan
Multan 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

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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 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

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• 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 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.

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• 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.

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)

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Product levels

 MARKET STRUCTURE:
APPLICATION Economy Small Small high Luxury Pick-up 4X4
segment low segment car segment segment
segment segment
PRODUCTS Mehran*, Cultus* Toyota Toyota Hilux Land
Cuore Corolla, Camry, Ravi* Cruiser
Honda City*, Honda
Honda Civic* Accord*

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 (*)

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MARKET SIZE:
Past Growth VOLUME

Growth
MARKET SEGMENT 2005 2006 2007 2008 2009
P.A
Economical Mehran 31165 35982 37007 35526 13421
42%
Cuore 8592 7883 12776 12204 5852
16%
Small low segment Cultus 15591 21342 29880 27662 9181
31%
Liana - 5370 5964 2605 684
5%
Small high Toyota corolla 23002 30527 35762 33640 26760 19%
segment Honda civic 12359 12274 5610 5813 4985 20%
Honda city 11714 16136 11848 8439 6482 28%
Luxury car TOYOTA
- 21 43 17 54
segment CAMRY 36%
HILUX 3389 2551 52 2001 1534 13.88%
Pick-up segment
Ravi 3310 5418 10117 11828 12643 42.75%
LAND
4X4 segment 3520 5165 2125 4727 1616
CRUISER 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

MARKET
2010 2011 2012 2013 Growth P.A
SEGMENT
1779 1922 2402 2835
Mehran Growth by 18% almost
7 1 6 0
Production ended by
Cuore 1560 0 0 0
CKD
2267
1475 1806 2868
Cultus 7 Growth by 25%
0 9 6
Toyota corolla 3827 4439 5016 6019
Growth by 20%
0 3 4 0
Liana 751 25 0 0 Production ended
Growth increased
Honda civic 5850 6611 7636 8896
22.5%
Honda city 6660 6860 7272 7708 Increased 3% to 6%
TOYOTA CAMRY 10 16 28 87 Based on order
Growth increased by
HILUX 733 755 810 1000
11%
2079 2411 2870 3214
Ravi Growth increased 15%
2 8 0 4
LAND CRUISER 490 560 612 725 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 Introduction Growth Maturity Decline


Segments

Corolla Altis
1794cc
Corolla-Gli
Corolla-Xli
Corolla XE
Corolla-2.0 D
Saloon
Corolla-2.0 D

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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
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
70%
share
Competitors
Competitor extra market share 18%
share
Gross
Total 88%
Historical 3 43%
36.7% 22% 36% 56.5% 38%
Growth 5%
Projection 18% 17% 30% 11% 15% 14% 18%
Co’s 5.54% 13.86% 1.5% 2.3% 1.9% 19%
Profitability

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Distribution structure: (2008 to 2012)

For 2008 Year


Economy Segment Small High Segment Pickup 4x4
Segment Segment
Company Name Mehran Cuore City/Civic Corolla Baleno/ Hilux Land Total
(each) Liana Cruiser

Dealership 42 28 27 28 42 28 28 97

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

For 2010 Year


Economy Segment Small High Segment Pickup 4x4
Segment Segment
Company Name Mehran Cuore City/Civic Corolla Baleno/ Hilux Land Total
(each) Liana Cruiser

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

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For 2012 Year
Economy Segment Small High Pickup 4x4
Segment Segment
Company Name Mehran Cuore City/Civic Corolla Hilux Land Total
(each) Cruiser

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 All Pakistan Companies competitors Outlet


mln distribution turnover share turnover share 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.

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PRICE ANALYSIS
 Are the companies price and cost are competitive?
Indus Motors Co. Ltd
No Products CC Cost

1 Coure 800cc 709000


2 Cultus 1000cc 897000
3 Toyota corolla 1300cc 1269000
4 Toyota Camry 2400cc 6299000
5 Hilux 2800cc 3140000
6 Land cruiser 3800cc 13000000

Atlas Honda
No Products CC Cost

1 Honda civic 1500cc 1229000


2 Honda city 1300cc 1349000

Suzuki
No Products CC Cost

1 Mehran 800cc 514000


2 Ravi 800cc 489000
3 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 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?

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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.

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

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 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

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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EXTERNAL INTERNAL
ANALYSIS 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

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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. Ltd
No Products CC Cost

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1 Coure 800cc 709000
2 Cultus 1000cc 897000
3 Toyota corolla 1300cc 1269000
4 Toyota Camry 2400cc 6299000
5 Hilux 2800cc 3140000
6 Land cruiser 3800cc 13000000

Atlas Honda
No Products CC Cost

1 Honda civic 1500cc 1229000


2 Honda city 1300cc 1349000

Suzuki
No Products CC Cost

1 Mehran 800cc 514000


2 Ravi 800cc 489000
3 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 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

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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)

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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.

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.

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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
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 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 Mitsubishi’s
earnings are also very close to each other.

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 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
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.

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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

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.

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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
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.

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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

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

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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
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.

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

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