BUSINESS PLAN FOR

INDUS MOTOR COMPANY LIMITED

Submitted to : Mr.Ekhlaque Ahmed

Submitted by : Noman Khaleeq (8151)
Shakaib Pervaiz (8154)

LETTER OF TRANSMITTAL
29th DECEMBER 2009
Mr. MUHAMMAD EKHLAQUE AHMED,
IoBM,
Korangi Creek,
Karachi
Respected Sir;
We are pleased to inform you that the final report you assigned for has been completed
and is ready for your perusal. This report as per your instruction has covered all the
authentic areas of concern and contains all the relevant information. We would dearly like
to thank you for the faith you showed in our capabilities and the encouragement you gave
us when assigning us the report.
Sincerely,
NOMAN KHALEEQ (8151)
0333-2444330 @: noman_2614@hotmail.com
SHAKAIB PERVAIZ (8154)
0322-2991037 @: shakaib_pervaiz@yahoo.com

ACKNOWLEDGEMENT

We would like to acknowledge our instructor, Mr. MUAHMMAD EKHLQUE AHMED

for his co-ordination and guidance. His research skills and knowledge marked a road
map for our project throughout the semester. We appreciated his willingness to help us
and guide us in the project at any point in the semester. Hopefully this report will serve to
its best.
We would also like to take this opportunity to thank all the professionals from INDUS
MOTOR COMPANY LIMITED, marketing & R & D department who guided us in our
project report and for being supportive and being polite and courteous enough to bear
with us and providing us the information about the project.
We would also like to thank our fellow classmates for making this learning experience a
thoroughly productive and enjoyable one.
Thank you,
NOMAN KHALEEQ
SHAKAIB PERVAIZ

INDUS MOTOR COMPANY

BRIEF OVERVIEW
Indus Motor Company (IMC) is a joint venture between the House of Habib , Toyota
Motor Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for
assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan
since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor
Company Ltd. vehicles in Pakistan through its dealership network.
The company was incorporated in Pakistan as a public limited company in December
1989 and started commercial production in May 1993. The shares of company are quoted
on the stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho
Corporation have 25 % stake in the company equity. The majority shareholder is the
House of Habib.
IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in
an area measuring over 105 acres.
Indus Motor company's plant is the only manufacturing site in the world where both
Toyota and Daihatsu brands are being manufactured.
Heavy investment was made to build its production facilities based on state of art
technologies. To ensure highest level of productivity world-renowned Toyota Production
Systems are implemented.
IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota
Hilux Single Cabin 4x2 and 4 versions of Daihatsu Cuore. Indus also have a wide range
of imported vehicles.

Business Scope

Business Scope describes The Business we are / want to be in through the eyes of the
customers. This content describes that which business we are in, where are we operating,
what is the need, who is the users, what is the added value and what are the boundaries
and future scope.
Where
Indus Motor Company has the countrys 2nd largest in-house manufacturing capability in
the country at its plants located in Karachi.
The head office for the operations is located in the plant premises in Karachi while to
ensure smooth operations all over Pakistan, the Regional Offices for Central Region is
located in Lahore and for North Region in Islamabad.
To meet customer demand everywhere, Indus Motor has a network of 31 authorize dealer
countrywide and is further expanding its network.

What Needs
Indus Motors is catering to the basic need of Transport .Indus is providing ease in
conveyance and mobility to users by providing Quality Cars at affordable prices.
Whose needs
They are catering to the needs of people living in Urban & Rural Areas of Pakistan. The
main market is of Indus Motors is the Urban Population of Pakistan but a good
percentage of the Toyota & Daihatsu customers also belonging to Rural Area.

Added Value

Indus Motor provides its customers not only with Superior Quality Toyota & Daihatsu
Products but also with some added value. This added value includes:

Cruise Control. (Unique Spec)

Quality After Sales Service

Availability of Toyota & Daihatsu Genuine Parts & Accessories.

High Resale Value.

Considerations
The considerations for Indus Motor Company involve competition from the other 2 Japan
based companies operating in Pakistan i.e. Honda Atlas Car Pakistan Ltd. and Pak Suzuki
Motor Company Ltd.
Business we are not in
IMC is not in the business of producing 2 wheelers, tractors, trucks and LTVs.
Boundaries and Future Scope
-

Matching Production with increasing demands in the future.

Bringing new products in Economy Segments.

To Export Toyota & Daihatsu Vehicles in international markets where Toyota is

presently being imported from Japan or other manufacturing countries.

To acquire top position in the auto car market.

THE MARKET STRUCTURE

ECONOM
Y

SMALLLOW

SMALLHIGH

LUXURYMEDIUM

Coure/
Mehran

Santro/
Cultus/
Alto

Liana/Civic
City/
Corolla

Accord/
Camry

MARKET
SEGMENTS
MAJOR
PRODUCTS

END USERS

Family
members/
Mechanic
s/ Car
Dealers

Family/
Friends

Dealers

Upper
Middle /
Upperupper/Busine
ss managers

Business
Executives/
Upperupper/ Elite
Class

Family/
Friends/
Authorized
Dealers/
Companies

Middle/
Upper
Middle
Class

Colleagues/
Friends/ Car
Dealers/
Companies

Lower/
Middle
Class

INFLUENCERS

Unauthorize
d
Dealers

Transporters
(car carriers)

CHANNELS

AUTOMOBILE
MANAFACTURER

MARKET STRUCTURE ANALYSIS

ECONOMY SEGMENT

The major products of this segment are Mehran, Coure etc. These cars are classified
economical on the basis of cost and fuel efficiency. They are supposed to target the lower
and middle classes as they price between Rs.450,000-700,000.The key influencers in
these segments are mechanics, family and car dealers.

SMALL LOW SEGMENT

The major products in this segment are Santro,Alto,Used Vitz and Cultus.
This segment evolves around price sensitive consumers. These cars are fuel efficient and
low maintenance is required in these cars. The people who buy these cars usually belong
to middle class and upper classes as their price range is approx Rs. 700,000-950,000. The
people who influence these cars are family and friends.

SMALL HIGH SEGMENT

The major products of this segment include Used Premio, Nissan, Baleno/Liana, City,
Civic and Corolla. The end users of this particular segment prefer comfort, safety and
prestige. The upper middle and the upper-upper and the business class are the consumers
of these cars. The price range of these cars is Rs.1 million-1.5 million approx. Key
influencers are colleagues friends relatives car dealers.

LUXURY SEGMENT

This segment is designed to cater the people of upper-upper class, Corporate Executives
and elite classes. The major focus of this segment is luxury, Brand Image, Safety, and
Pleasure Drive. The major products of this segment include Toyota Camry and Honda
Accord. The price range of these cars is above 35 million rupees. The key influencers are
Family friends authorized dealers and Corporate executives.

MARKET SIZE (PAST 4 YEARS)

CHANGES & EFFECT

Financial year 2005-2006 was boom period of auto industry, there was a rapid
growth because of economic growth, availability of auto financing, lower interest
rates, long term auto policy, workers remittance and infrastructure development.

In the FY 2007-08 & 2008-09 market drop 15% & 48% respectively due to
economic slowdown. Rising interest rates, lower auto financing, inflation, high
input cost, Pak rupee depreciation against dollar & Yen

Another reason of market drop in 08-09 was Phase out period of Old Corolla.

Auto Financing

MARKET SIZE (FUTURE 4 YEARS)

FORECASTING ASSUMPTIONS

Downward revision in Withholding Tax Slabs at Registration stage

Ban on Used Car Imports

Revisit and follow AIDP in letter & spirit, No abrupt change in policies, dialogue
with stakeholders

Review list of localization

Reduce interest rates on Auto Financing

Removal of FED on Royalty and Technical Fee at the rate of 10% of remittance

Consultation of industry on Free Trade Agreements / Regional Trade Agreements.

Initiate Export to neighboring countries.

Auto Industry and GOP have jointly made a long term auto policy for sustainable
growth of the industry

COMPETITION SEGMENT MATRIX

For PC SEGMENT

SEGMENT

COMPETITION
ECONOMY

SMALL LOW

SMALL HIGH

LUXURY

OVERALL

INDUS MOTOR

5852

26760

61

32673

PAK SUZUKI

13421

15748

851

30020

ATLAS HONDS

11144

112

11256

IMPORTED CARS

1285

3880

5165

ANALYSIS:

Indus is the market leader in Passenger car segment of auto industry, however if
we include Light Commercial vehicle it is Pak Suzuki who has the highest market
share.

The competitive segment show us that Indus doesnt have any product available
in Small Low segment which is major set back for the company as the total
contribution of this segment is around 20% of the overall sale in passenger car.

In Luxury segment Indus Toyota Camry is struggling against Hondas Accord

because the company has not upgraded its model since 2005 where as Accord has
changed its model in 2007.If we compare sale of Accord 7 Camry in 2006 we see
that Camry was market Leader. So Indus should look to upgrade its present
Camry model.

As Coure has reached a maturity state in the Economy segment we need to come
up with a new product plan to cater the demands of Economy and Small-Low as
the purchasing power of consumers have declined immensely due to the changes
in financing policies and overall inflation. The target is set to increase profitability
and overall market share.

DISTRIBUTION STRUCTURE

Sr#

COMPANY

AUTHORIZED DEALERS

INDUS MOTOR COMPANY

31

HONDA ATLAS CARS

18

PAK SUZUKI

70

TOTAL

119

The above drawn table explains the distribution structure of the key players of auto
industry. Indus biggest rival in the industry is Honda which has 18 dealers in its
dealership network compared to Indus 31 dealers, which shows Indus has stronger
coverage then Honda. Pak Suzuki has the biggest dealer network of the industry i.e 70
dealers which enables them to generate extra sales especially from rural areas of Pakistan.

IMPACT OF UNAUTHORIZED DEALERS

COMPANY

% SALE THROUGH

% SALE THROUGH

AUTHORIZED

UNAUTHORIZED

DEALERS

DEALERS

INDUS MOTOR COMPANY

90%

10%

HONDA ATLAS CARS

95%

5%

PAK SUZUKI

98%

2%

A little percentage of manufactured cars is also sold through unauthorized dealers and not
through company authorized dealers. These unauthorized dealers are threat for the
manufacturing companies because these unauthorized dealers plays role of investors and

create an artificial demand in the market, which make genuine customers pay extra
premium on price and become a major contributor of customer dissatisfaction at the point
of sale. Figures show that Indus is affected by 10% whereas Honda is affected by 5 %
from these unauthorized dealers.

INDUS MOTOR AUTHORIZE DEALER NETWORK

Indus Motor has total 31 dealers Nationwide, out of which 30 dealers are 3S (Sales,
Service, Spare) whereas 1 dealer which has been recently opened last year is 1S )Sales
outlet).
Indus has divided it Sales into three regions namely south, central & north. There are total
10 dealers in south region, 13 dealers in central region and 8 dealers in north region.
The dealerships location can be seen from the below mention picture.

REGION
South

Central

North

CITY
Karachi
Hyderabad
Quetta
Lahore
Multan
Faisalabad
Sialkot
Rahimyar Khan
Sargodha
Gujranwala
Islamabad
Rawal Pindi
Peshawar
Azad Kashmir
D.I.Khan
Mardan
TOTAL

NUMBER OF DEALERS
8
1
1
6
2
1
1
1
1
1
3
1
1
1
1
1
31

Although Indus has greater dealer network then its rival Honda but still there are parts of
country where still Toyota doesnt exist. These include area such as Bhawalpur,
D.G.Khan, Sukkur, Abbotabad etc. Although Toyota is being sold in these areas as well
from the near by city dealer but still unavailability of Toyota 3S in this region causes
dissatisfaction for customer who have to travel miles to avail maintenance service and
spare parts.
Toyota Dealers provide Quality after sales service to all Toyota & Daihatsu customer. The
existing Toyota & Daihatsu units in operation exceed 200,000.This big volume in after
sales service provides opportunity for all dealers to grab additional profits. Indus believe
in Toyotas philosophy that its is After sales service that sells 2 nd car and thus is
continuously gearing up its dealerships to meet customer expectations.
Honda on the other hand has advantage over Toyota as they have number of 2S dealers
available all over Pakistan. These 2S dealers are called Pit Stops and allow customer to
visit and get there car periodically maintained from these Pit Stops.

PRODUCT LIFE CYCLE

PRODUCTS INTRODUCTION

GROWTH

MATURITY

DECLINE

IMC:
Corolla
Coure
Camry
Honda Atlas:
Civic
City
Accord
Pak Suzuki:
Mehran
Alto
Cultus
Liana
APV

CHANGES AND EFFECTS

IMCs Toyota Corolla launched in August 2009 is in growth stage and showing
excellent results in 2009-10

Coure is in maturity stage & in expected to enter in decline stage in 3 years.IMC

need to pay extra attention to upgrade coure model.

Camry is also in maturity stage, the launch of new accord has pushed Camry in
maturity, and Camry sale is also expected to decline after 3 to 4 years and will
enter decline stage. Thus it is necessary to take action on model up gradation.

MARKET SHARE

Source: PAMA

According to the figures announced by PAMA at the end of FY 08-09 PAK SUZUKI
leads the market with 52% market share during last FY 08-09. Pak Suzuki main reason
for having the biggest market share is the affordable prices of cars. Indus Motors stands
2nd among the automobile manufacturers. The launch of New Corolla in August 08 has
prove to be one of the biggest success for the company, because the model has hit the
heart of consumers and the sale of new corolla in FY 09-10 is expected to be around
40,000 units which will raise Indus market share to 38%. Honda holds the 3 rd place in the
market with 12% market share. Honda lost 3% market share to Indus compared to last
year sale as the response of New City was not as per Hondas market share.

DRIVING FORCES OF AUTOMOBILE

INDUSTRY

TECHNOLOGICAL
Technology has become one of the major driving forces in the auto industry. If we see
five years back the customers desire of new technological feature was not that much but
now with the increase in car prices the customer expectation level has also raise. Among
the technological features safety is one of the major concerns and thus we now see
availability of Air bags in small high segment. ABS future is also now available in all the
small high segment cars.
Indus exceeds in providing customer better value for money by giving feature of cruise
control in Toyota Altis against their competitor product Honda Civic.
From different technological advancement made in last few years we can project that in
coming years technology will be one of the major driving forces of the industry.

PRODUCT SUPPORT
Product support means the support which companies have to support their product after
point of sales that is during their usage. This includes easy availability of spare parts at
cheaper rate and availability of Hi-tech professionals who can take care of problems
faced by customers. All three big players of industry million of rupees of foreign and
domestic training of their staff and dealers staff to provide best customer service. Honda
compare to Toyota & Suzuki struggle is providing quality service because of lesser
number of dealership and high cost of spare parts.
Thus affordability of After sales service is one important point in the mind of customers
when they go purchase of a new vehicle and is therefore an important driving force.

ECONOMICAL
Economy has weakened considerably but stable following assistance from IMF and other
Friends of Pakistan donors.

The overall market decline by 48% in 08-09 due to following economic reasons:

Depreciation of Pak Rupee against dollar and Yen

Rising Interest rate and lower car financing

POLITICAL
Political instability is one of the major driving forces of the industry. Government
introduce 5% FED in budget in 08-09 which played a key roll in raising prices of cars
and in decline of sales. Extensive push of PAMA members has lead to withdrawal of this
duty on 09-10.

INDUSTRY TREND
PORTERS FIVE FORCES

THREAT OF NEW ENTRANT:

Threat of New Entrant is LOW because of the following reasons.
BIG PLAYERS:
The industry is presently being ruled by three big Japanese brands Toyota, Honda &
Suzuki. This is the biggest issue which a new entrant cant take care of easily because
these brands have already develop strong perception in the mind of Pakistani consumers.
HIGH CAPITAL COST:
The Capital required establishing an automobile manufacturing company is very high and
requires a heavy investment which seems to be the biggest barrier for new entrants.
GOVERNMENT LAWS & REGULARIONS:
There are various Laws and regulations associated with this industry. This approval will
require time for new entrants.
DISTRIBUTION NETWORK
Establishing distribution of this particular industry is also very difficult and huge cost is
involved. Thus establishing a distributor network is also very difficult for new entrants.

BARGAINING POWER
Bargaining Power of consumer is MEDIUM because there are few brands in the industry
in which they can make selection like Toyota, Honda, and Suzuki. The only area where

customer can use their bargaining power is in used cars or imported vehicle. The
companies thus face a big threat from consumer because of this market.

THREAT OF SUBSTITUTE
The threat of substitute is LOW because the transport system of Pakistan is very weak.
Only in Karachi there is little threat because of the introduction of 5000 CNG buses by
City Government, because these bused will provide customer convenience on cheaper
rate.
Beside passenger car segment the growing 2 wheeler market is high because in that
segment Chinese products are available at very cheaper rates.

BARGAINING POWER OF SUPPLIER

Bargaining power of buyer is also very LOW except for few who have sole distribution
of some parts.
According to government regulation it is compulsory for automaker to localize a
percentage of auto parts. The automakers business is very important for buyer because it
is bread and butter for them. In previous year the automobile market has seen some
suppliers dieing because of drop in car sales.
The threat of supplier to enter in automaker business is very low because PAMA has
strong policy on it. The industry saw this happening when Omar Jibran, one of the major
vendors of plastic parts for auto industry establish a car company by name of Adam
Market and introduce a car in economy segment by name of Revo.
In retaliation to this step Pak Suzuki who was the major buyer of OJ parts established its
own Plastic Shop and reduces business with Omar Jibran by 70%, which was a major set
back for Omar Jobran.
Thus by above discussion we can conclude that bargaining power of Supplier is low
because the support of big players from their parent company is very high and
unbeatable.

INTENSITY OF RIVALRY AMONG COMPETITORS

Market is driven by three major players; these players face tough competition in small
high segments where all three players product exist.
Since all three players are of same size so it is difficult for any one of them to create a
huge gap in technology.
An important step which Indus can take to beat its Rival Honda is by introducing Corolla
CNG, which has highest demand in the market and will give Indus a competitive
advantage against its rival Honda. Thus we can say that intensity of Rivalry competitor is
MEDIUM.

INDUTRY ATTRACTIVENESS SUMMARY

INDUSTRY ATTRACTIVENESS
THREAT OF NEW ENTRANT

LOW

BARGAINING POWER

THREAT OF SUBSTITUTE

BARGAINING POWER OF SUPPLIER

INTENSITY OF RIVALRY AMONG COMPETITORS

MEDIUM

HIGH

SWOT ANALYSIS
Following is the SWOT of Indus Motor Company Limited which we identify through our
research:

STRENGTHS
The key strengths of Indus Motor Company has over its competitors are:
1. Toyota is the only player producing Diesel Car namely Corolla 2.OD.
2. Toyota has an advantage of having cheaper After Sales service and spare parts
then its rival Honda. This strength is the most important for customer because if
the new vehicle price of all players is same or slightly different this feature
becomes the key selling point for sale.
3. Toyota is market leader in Small high segment with its product Corolla beating its
competitor Honda City, Honda Civic and Suzuki Liana by comprehensive margin.
This segment is actually real profitable segment and its an advantage to Indus that
consumer of this class have strong trust on Corollas performance.
4. The strong R & D of Toyota allows manufacturing vehicles according to the
changing demands of the consumers.
5. Toyota has hi-tech Press shop which enables Indus to produce vehicles are
cheaper rate then its rival Honda.
6. Toyota resale value is the much higher then its competitor Honda. The market
value of Toyota vehicle reduces by 5% after 3 years whereas the Honda value
reduces 10%-15%.
7. Since most of the suppliers are in Karachi & Indus is also located in Karachi, it
has advantage of less transportation cost of raw material over its competitor
Honda which is in Lahore.

WEAKNESSES
Like all auto mobile companies Indus Motor too has few weaknesses which are listed
below:

1. No product available in small low segment, which makes easier for its competitor
Suzuki to have monopoly and excel in this segment. This segment covers 20% of
the total sale of cars.
2. Compare to Honda, Indus Motor doesnt have Indus Own dealership which
become Indus weakness in a sense that dealer sometimes may charge their own
prices disregarding Indus guidance.
3. Compared to competitor Suzuki, Indus has weak distribution Network.

OPPORTUNITIES
Following are the prominent opportunities available for Indus Motor Company:
1. Indus can export its product on cheaper prices to Afghanistan and central Asian
states who are importing Toyota from Japan and other countries.
2. There are many Toyota products available worldwide, Indus can also introduce
the cheaper products in different segment and can take advantage over
competitors by giving customer more choices.
3. There is an opportunity for Toyota to introduce Corolla in CNG variant which are
in high demand and can also introduce World famous Hybrid model Toyota Prius.

THREATS
Following are the most important threat to Indus Motor Company:
1. Lower Price of Pak Suzuki product Suzuki Liana in Small High segment
compares to Indus Product Toyota Corolla is one of the biggest threats to Indus
Motors. As with the rapid increase in price the consumer will be left with only one
choice of Liana over Corolla.
2. The biggest threat for the company is the current political and economic
instability of the country. The policies of government are not always supporting

the auto sector, imposing high import duties and taxes already increases the prices
drastically.

CONFRONTATION MATRIX

With the help of the SWOT analysis, we have derived following strategies related to the
company in the confrontation matrix. The strategies we identified in this matrix are
mentioned below:

SO STRATEGIES
1. Indus is market leader in Small high segment. 70% of the consumer of this
segment coverts its petrol corolla into CNG. Thus Indus can use this advantage
and introduce CNG Corolla by using their strong R & D.
2. By using its technical advantage of press shop Indus can introduce new Toyota
models in Small Low segment. Through press shop Indus can produce sheet metal
parts at cheaper cost leading to lowered prices of vehicle.

WO STRATEGIES
1. Indus Motor can introduce Toyota Model in small high segment and can
export that model in backward countries like Bhutan, Nepal etc who are
presently importing Toyota from Japan and other countries.

ST STRATEGIES
1. Localize more percentage of sheet metal parts by producing in own press shop
to reduce the price of corolla and reduce gap between corolla and Liana price.

WT STRATEGIES
1. As the economic and political conditions are uncertain which already affected the
purchasing power of consumer, at this point it is necessary for Indus to use its

R&D to develop a car that is more economical and within reach of ordinary
consumer.

CUSTOMER BUYING CRITERIA

Factor Number
More Mileage
Low Maintenance
Cost

Absolutely

Very

Quite

Nice to

Not

Dont

Critical

Important

Important

have

Significant

Want it

Safety
Spare Price

CNG Fitted

Durability
Price

Resale Value

Drive Comfort

Luxury
Smooth Drive

Design
Brand Name

Quality

After-Sales Service

TOYOTA

ATLAS

INDUS

HONDA

10
6
6

8
4
4

7
5
3

9
4
6

5. Durability

5
8

4
7

0
6

5
4

6. Resale Value

10

7. Drive Comfort
8. Luxury

9. Smooth Drive

5
5

3
4

4
3

2
2

10. Design

11. Brand Name

12. Quality

QUALITY & PRICE

Non-Price attributes effecting

customer choice

WEIGHTAGE

PRODUCT RELATED
1. More Mileage
2. Safety
3. Spare Price
4. CNG Fitted

SUZUKI

80%

SERVICE RELATED

20%

13. After Sales service

10

14. Low Maintenance Cost

10

10

100%

68%

60%

63%

GONE UP

GONE UP

SAME

RS. 1,150,000

RS.

RS. 550,000 TO

TO 1,900,000

1,380,000

1,500,000

TOTAL

Has Quality gone up/down (+/-) in past 4 years

Relative Price today

Relative Price 4 years ago

TO
RS. 800,000 to

1,800,000
RS. 850,000

RS 350,000 TO

1,400,000

TO

1,000,000

1,350,000

CUSTOMER BUYING CRITERIA MATRIX

KEEP
IT UP

GOOO
D

IMPROV
E
FAST

COST ANALYSIS

VALUE CHAIN

TOYOTA (%)

HONDA (%)

Raw material

95.67%

93.45%

Salaries and wages

0.65%

0.759%

Spares Consumed

0.27%

2.05%

Fuel And Power

0.25%

0.4%

Vehicle Running
Royalty

0.26%
2.01%

0.018%
1.14%

Depreciation
Technical assistance

0.37%
0.07%

0.93%
0.405%

Repair And Maintenance

Insurance

0.14%
0.06%

0.30%
0.056%

Printing and stationary

0.03%

0.011%

Parts development

0.07%

0.011%

Subscription
Communication

0.00%
0.01%

0.000%
0.015%

Transportation
Traveling

0.01%
0.08%

0.08%
0.057%

Legal and professional

0.00%

0.001%

Rent, rates and taxes

0.03%

0.006%

Canteen

0.01%

0.22%

TOTAL

100.00%

100.00%

ANALYSIS OF COST COMPARISON

Raw material in comparison to the production, Indus motors consumes more raw material
as compare to Honda. The total manufacturing cost of Indus motors is comparatively

higher than Honda and the big chunk of their cost constitutes in Raw material. The main
reason being the very high production of cars in comparison to Honda and they operate
on almost full capacity with minimal errors that is almost full capacity utilization is
honored by Toyota.
Part development section of the value chain is almost similar among the two but the key
point that has to be highlighted is the spares consumed by Honda. This section of there
cost constitutes a major imbalance among the competitor they reason being the
inefficiency of their machinery.
Regarding the royalties Toyota is paying more than Honda. Because in IMC Pakistan,
House of Habib has more share thats why they have to pay more royalty to the principal
Toyota whereas as in Atlas Honda cars the major share is of Honda Japan, which means
they are already taking up the profits in greater percentage then local partnet Sheerazi
Group.

IMC Vision & Mission Statement

IMC VISION STATEMENT

IMCs Vision is to be the most respected and successful enterprise,

delighting customers with a wide range of products and solutions in the
automobile industry with the best people and the best technology.

ANALYSIS OF VISION STATEMENT

Customers

Product

Market

and

Services

Technology

Survival,

Self

Concern for

Concern

Growth and

Concept

Public

for

Image

Employees

Profitability

The statement is very well composed and carries the essence of a flourishing
organization. The target is well set to cater customers with advancement in products and
technology. It carries a motivation for the human resource as well to create such an
exemplary institution. However a bit of Growth and profitability vision is lacking.

PROPOSED VISION STATEMENT

IMCs Vision is to become the most respected and successful enterprise by
maintaining steady growth , delighting customers with a wide range of
products and solutions in the automobile industry with the best people and
the best technology.

Customers

Product

Market

and

Services

Technology

Survival,

Self

Concern for

Concern

Growth and

Concept

Public

for

Image

Employees

Profitability

IMC MISSION STATEMENT

ANALYSIS OF MISSION STATEMENT

The statement is very well versed and focuses on teamwork and effective implementation
to achieve all major objectives regarding corporate image, quality, safety, customer
satisfaction, optimum production, profitability. However it also carries an essence of a
vision to become the best in the industry.

BUSINESS OBJECTIVES

After doing detail study and research on Indus Motor Company, we propose certain
business objectives for the company which is mention below:
1. Increase Market share by 3% in two years by introduction of CNG Corolla in
Small-High segment.
2. Introduction of New Model in Small Low Segment and increase Market share by
3%
3. Increase Distribution network form 31 to 40 in coming two years.
4. Discuss with TMC Japan & Initiate Export of Corolla to Afghanistan, Bangldesh
and Central Asian Countries
5. Increase Capacity by modifying existing plant through process modifications and
atomization.(Current Plant has capacity of 50K and is operating at 37K i.e75%
utilization)

KEY ISSUES
Following Key Issues are the main problems in achieving the above describe objectives:

Pricing of New Product due to high cost of new product development.

Since Indus out source its dealership, at this time when all the businesses are
down it is difficult to find local candidates who are willing to invest in opening
Toyota Dealership.

Cost reduction to offer competitive Price for International Market.

Skill level of staff is not as per standards of running plant after atomization.

Macro Economic Issues

High Interest rates will remain one of the key issue, in all developed countries
the car sales mainly depends on low interest rates, thus it is extremely important

that banks reduce their rates as the growth of industry largely depend on this
factor.

Consistent government policy on restriction of used car imports.

Stable law and order situation.

Stable Fuel Prices by government and definite countermeasure on shortage of

CNG.

IMPACT OF ISSUES ON STRATEGIC PROFILE

Issue Number
Issue Name

Issue 1

Issue 2

Issue 3

Pricing of New Finding local Cost reduction

Issue 4
Skill Level of

Product

candidates

in present

Staff

Customers

++

Market segments

++

Needs/wants/applications

++

++

Products (prices)/services

++

++

Product Creation Process

++

Sales Acquisition Process

++

++

++

Operations

++

++

++

Technology

++

++

++

Plant & Equipment

++

++

++

Distribution Channel

Money

++

process

People
Raw Material

+
+

++

+
++

++

++

++

++

++ = Very High Impact

+ = High Impact

STRATEGIC DIRECTION

Based on our research following strategic direction is recommended for Indus Motor
Company:

Acquire International Business

To establish strategic business alliance with neighboring countries for consistent growth
& profits.

Provide Innovative Product:

Following customer first philosophy Indus should continue introducing new products in
different segment. This will not only provide choice to Toyota customers but also will
help in increase market share of the company.

Ensure Product & Service Availability

Indus should increase its production capacity and distribution network to cater switching
of customer from Toyota to any other brand due to unavailability of products.

Strong Implementation of Toyota Global Standards

Indus should continuous focusing on implementation of various Japanese concepts like

Kaizen and Toyota Production Standards to achieve highest quality of vehicle to enhance
customer satisfaction and business.

Respect for People

Respect for people is the second pillar Toyota Way. Indus should develop competitive
value through mutual trust and mutual responsibility between IMC team and the
company. Indus should train its staff as the most important sustainable competitive
resource.

INDUS VS COMPETITORS

Parameters

Indus Motors

Pak Suzuki

Honda

Product Life Cycle

Growth

Growth

Growth

Rs. 42.3 Billions

Rs. 14.1 Billions

Rs. 37.9
Annual T/O

Billions

Coure, Corolla, Altis

Product Portfolio

Camry , Land
Cruiser, Prado

Mehran , Alto, Cultus,

Bolan , Liana, APV

City
Civic
Accord

Balanced presence in
all segments

Major Focus on

Upper segment of

Economy Segment

the market

Production Capacity

76% Utilized

42% Utilized

Marketing Operations Average

Better

Average

High

Average

Mediocre

Better

Above Average

Experienced

Customer Base

excluding small low

segment
75% Utilized

Financial Capabilities
Brand Ownership

High
Better

Managers Capabilities Experienced

Area

Objective

Target

Prod
uct

BUSINESS OBJECTIVE ACTION PLAN

-

Increase

Introduction

MS by

Action Plan
- Conduct a survey to find actual demand of
Corolla CNG

Budget

Resp

Target Date

Rs 10M

Marketing

Mar-10

- Discuss Survey result with Japan for project

of Corolla in
Development

CNG Variant

4%

Introduction
of New

Increase
MS by

Model in

8%

Small Low
Channel Management

Segment
- Ensure
availability of

Increase

of Toyota &

Dealershi

Daihatsu all

p from 31

over

to 40

Pakistan

Business
Development

- Export of
Corolla to

Export

Afghanistan

3500

and Central

Units per

Asian

execution
- Develop CNG components for modification in

Marketing

May-10

Corolla
- Develop one Vehicle for Test & Trial Purpose
- Conduct Test & trial for 100,000Km
- Develop Promotional Campaign
- Launch Corolla CNG
- Conduct Survey for Toyota Product in small low

Technical
Technical
Technical
Marketing
Marketing

Jun-10
Aug-10
Sep-Nov 10
Sep-10
Dec-10

segment
- Discuss Survey result with Japan
- Develop New Product Development Plan
- Modification in Plant
- Development of Localize Parts
- Develop Promotional Campaign
- Launch Yaris
- Conduct Survey to figure out locations for new

Marketing
Marketing
Marketing
Production
Technical
Marketing
Marketing

Mar-10
May-10
Jun-09
Jul 10 - Dec 10
Jul 10- Jun 11
Jan - Mar 11
Aug-11

dealerships
- Newspaper Add for prospect dealer applications
- Conduct candidates interview
- Study & investigate candidate's profile
- Issue LOI to selected candidate
- Development of Dealership
- Inauguration of Dealership
- Discuss Viability if Project with TMC Japan
- Conduct Survey on variant demand
- Develop channel plan for export
- Fulfill Export Requirements
- Develop 1st Batch for Export

Rs 30M

Dec-10
Rs 1M

Marketing
Jan - Oct 2011
Dec-11

Rs 5M

Marketing

Dec-11

annum

Countries

- Export 1st Batch to Afghanistan

Area

Objective

Target

Capacity Enhancement

BUSINESS OBJECTIVE ACTION PLAN

- Increase

Increase

Capacity by

Capacity

modifying

from 50K

existing
plant.

to 60K

Action Plan
- Study Processes
- Identify Stagnation Points
- Develop countermeasure
- Provide new pneumatic tools on assembly line
- Develop specialize Kaizen Trolleys for different
processed
- Modify current Kanban System in material
control section
- Check Efficiency and Productivity by reducing

Budget

Resp

Target Date

Rs 15M

Technical /

Dec-11

Production

companys

takt time
Advertising
- Newspaper
- Magazine
- Radio
- Outdoor sites
Sales Promotion
- Display
- Broacher
- Posters

target

- Banners

- Increase
Promotion Plan

Brand
awareness
support
sales to
achieve

Increase
MS by
1%

10M

Marketing

Jan 10 - Dec
10