WHY TOYOTA SHARE IS MORE THAN THE SHARE OF HONDA?

A special project conducted on the directions of Sir ZARGHAM-ULLAH- KHAN

1st Feb, 2010

Research Conducted by : Mubasher Nazir Asif Ali Usman Javaid Salman Amin Rana Mobashsher Ahmad

HAILEY COLLEGE OF BANKING & FINANCE

Dedication
We dedicate this effort to our loving parents Because it is only because of them that we are Enjoying such a status of life. We are very happy In the environment of HAILEY COLLEGE OF BANKING AND FINANCE And enjoying with nice friends and faculty

ACKNOWLEDGEMENT

COUNTLESS THANKS TO HE WHO IS LORD OF LORDS

At first instant, humbly we bow our head with all the feeling of our heart and soul before the Almighty Allah, the beneficent, the omniscient who bestowed us with all the mental abilities to work out this project. We feel highly honoured to express our profound gratitude to our respected teacher PROF.Zargam, whos ever encouraging, keen interest and sympathetic behaviour proved to be a light house to complete this project. we would like to express our cordial gratitude to the employees of Honda and toyota Lahore office, especially manager of Honda and

MR.

JAVED IQBAL MARATH,

MR.Wasif Razzaq,manager of toyota who cooperated with us in

the data collection procedure and respondents in the working sphere.We would commit a moral lapse if we do not mention our parents through whose patronage prayers, we happened to come up to this level of qualification

LETTER OF TRANSMITTAL

February 01, 2010 ZARGHAM_ULLAH_KHAN HCBF PU LAHORE (CURST ROAD LAHORE)

Dear sir ZARGHAM_ULLAH_KHAN:

We are submitting to you the report, due February 01, 2010 , that you requested. The report is entitled WHY TOYOTA SHARE IS MORE THAN THE SHARE OF HONDA? The purpose of the report is to inform you to find out the reasons that are making higher Toyota share in the market as compared to Honda..The content of this report concentrates on the reasons that are not apparent on the surface. This report also discusses the recommendations given by us on which the companies should work in order to increase their sales. Our experience of conducting the research was very good. Many of the respondents were very helpful in giving their opinion and at the same time we had some bad experience as well. On the whole the field work of getting the opinion of the respondents was good. If you should have any questions concerning our project and paper please fell free to contact Mubasher Nazir at 0333-4824064 & Usman Javaid 0345-4353310

Sincerely,

Mubasher Nazir (m06bba014) Asif Ali (m06bba043) Usman Javaid (m06bba050) Salman Amin (m06bba056) Rana Mobashsher Ahmad (m06bba068)

LETTER OF AUTHORIZATION

TO WHOM IT MAY CONCERN

It is stated that the following persons;

Mubasher Nazir Asif Ali Usman Javaid Salman Amin Rana Mobashsher Ahmad are the students of HCBF University of the Punjab. They are directed to conduct the research on the topic of WHY TOYOTA SHARE IS MORE THAN THE SHARE OF HONDA? Kindly help them in any way they need for the fulfillment of their research project in a productive & good way.

Authorized by: _________________________

EXECUTIVE SUMMERY
The background of the project is to analyze higher sales of Toyota as compared to Honda in the Car Market. We will find out the reasons and factors those make strengthen and Strong position of Toyota in the market for that we decided to work on it. For that we must need to very closely and detailed overview of the company. Common perception about Toyota and Honda is that both companies have been fulfilling the perceive value of the customer, the price paid is much reliable against the value, in our research work; we will identify how much strong these arguments? What the reason are behind to successfully fulfill the perceived value of customer, what are the marketing or manufacturing success, is there any some other aspects or role to make more loyal customer. Toyota and Honda fulfill the whole of the customers need as they want in every of aspect but customer had already mindset about the price of both different Brand that these cars providing luxurious, reliable, and durable Facilities which other Car manufacturer are not much able to provide at competitive price. Toyota Indus and Honda atlas has been producing luxurious car. its time where as customer will be aware to the Toyota and Honda Car with reference to those brand, these brands penetrated in customers mind so Toyota and Honda has been getting a place in car market. The reason of conducting survey in the field between Toyota and Honda, we have been worked out to ascertain acceptance and attractiveness of the Toyota and Honda. The issues has been becoming as to consumer behavior that what those opinion, perception, attention involved in to go Toyota and Honda brands. Research has been conducting by (Honda and Toyota) dealers interviews, questionnaire filling by fifty Toyota and fifty for Honda lovers simultaneously in which middle and upper middle class people has been participating. A total of 40 respondents were surveyed from across the Karachi due to limited time. All respondents were surveyed by Mixed Questionnaire during May 2009, and were qualified as intending to purchase a Toyota or Honda vehicle. The study has a standard error of + 2.8%. Regarding to our target, Over 58.7% of the respondents surveyed are willing to buy Toyota and 42.3% of Honda.

According to chosen project we decided to find out the raw information and data regarding topic for that we obtained data from the official website of the Indus motors known as the Toyota and from Honda. We find that the brand loyalty of the customers is, Satisfaction fulfillment + Customer =Brand loyalty. The questionnaire that we designed contains 20 question and of which 19 are close ended questions and the last one is the open ended which asks the over all the view of the respondent about what they like Toyota or Honda. The main reason for accepting the close ended question was to get a real percentage value of the respondents believes. The population that we asked opinion was mostly driving Honda but majority of them had a wish to drive Toyota. As discussion on Brand loyalty way of surviving both companies offer three key elements of Sales, Service and Spare Parts, base on these elements the research is based on interviews and questionnaire about brand loyalty of Toyota and Honda Owners, as well as thanks for the technology that really curious, and helping out in finding of raw information which we visited to web sites of Indus Motors Company and Honda Atlas. In the light of entire project need to highlight some recommendation we found that Toyota and Honda gaining more and more competitive advantage because it purely involved according to the Pakistan environment but Honda has some weaknesses which Indus Motors Company has to keep on focusing in the customers point of view like The shape of car as customer perceive, Car interior of Honda in black, mostly people of Pakistan do not much like, instead, as they admired by bright and light color. The Honda Atlas Company has to facilitate customers more than Indus Motors Company in term of addition of dealership, Make possible to facilitate customer by 3S, if possible, addition of 2S as well as they providing 2S service for other products. Indus Motors Company has to establish 2S for more facilitate the customers by this IMC may become a automobile market and as they achieved its brand loyalty IMC may need to focus on LVC, Trucks etc that will be its competitive edge as they make it in consumers mind for that they do no much nee to give awareness about its new product. Honda Atlas Company has to improve its quality sales, service because the brand loyalty is sustained by truth, fairness, good dealing, and friendly attachment with loyal customer. The demand of the Honda is mainly sustain in market because of its fuel but side by side Honda Atlas Company has to improve its engine performance

and over all performance as well because some of respond about brand loyalty just goes to Toyota like in long distance because Honda does not sustained its performance.

TABLE OF CONTENTS

Sr no 1

Topic Problem statement

pg 10 11 13 14 15 16 18 22 23 24 27 28 29 33 38

Introduction

3 4 5 6 7 8 9 10 11 12 13 14 15

Installed Capacity of Cars and Light Commercial Vehicles (LCVs):

The Background of the Project

Introduction of the organizations business sector Present Status

Indus Motors Company (IMC) Introduction: (Numerical overview)

Mission Statement of Indus Motors Company Vision statement of Indus Motors Company Honda in Pakistan Vision Mission Products of HONDA Products of TOYOTA Sales of Toyota against Honda

16 17 18

Problem Statement Sample Questionnaire Questionnaire Analysis (description,options,graphical representation)

39 40 43

19 20

Conclusion: Recommendations Bibliography

64 66 67

10

PROBLEM STATEMENT

This research was conducted to find out the THE REASONS THAT WHY TOYOTA SHARE IS MORE THAN THE SHARE OF
HONDA?

We have used the field study method for our research. This method was most suited to our area of study because relevant information could be gathered in the actual environment. Various researches have been conducted in the past to find out the reasons of this problem statement concluding that brand image has an affect on the sales of cars. So, we are going to find out that is Toyota has more sales because of brand image or there is any other reason.

11

INTRODUCTION In the world trade, Automobile Sector is one of the largest segments. It is the major driver of economic growth and business activities. It puts multiplier impacts on the economy. Day-in, day-out around 200,000 vehicles roll off the worlds assembly lines with car as the dominant segment of the industry. The automobile sector has been registering high growth for the last four or five years due to the country's business friendly policies along with lower tariff rates, persistent growth in GDP, and per capita income. The automotive industry rightly prides itself on being recognized as the mother of all industries. In its folds it carries many different kinds of vehicles to provide mobility to people and goods. While they may appear to be simple machines, their design and manufacturing have much deeper roots in all the known technologies. In-depth knowledge and skillful application of mechanical, electrical, electronics, chemical and a host of other technologies culminate in achievement and improvement of the manufacturing base of a country, by focusing on a single product the automobile. This then provides an opportunity to produce a large number of goods and services for consumption of the entire international community. Use of the word mother for automotive industry is therefore the most appropriate description to define the nature and importance of the industry. Automotive industry in Pakistan started in 1950 and has gone through different phases1950s (Private sector). 1960s (Private sector). 1970s (Nationalization). 1980s onward (Privatization & entry of private sector). It is indeed heartening that the mother has once again smiled at Pakistan; fortunately the last 3 years have witnessed phenomenal growth in the industry in terms of technological advancements and production/sales volumes with the local contents rising as high as 90%. The industry is already employing 120,000 people; contributing more than 12 billion rupees to GDP, contributing more than Rs. 30 billion to the national exchequer in terms of duties and taxes, attracted investment worth Rs. 52 billion including a substantial foreign investment. Today the customers have choice to pick from a wide range of products including motorcycles, trucks, buses and cars of premier Japanese and Korean brands at internationally competitive prices, which has only become

12

possible due to local contents and availability of highly productive and inexpensive human resources. In Pakistan the automobile components manufacturing industry consists of mainly units producing original components for assembly under deletion program and units are producing reconditioned and original components for local use. There are more than 800 vendors in the country with a total investment of over eight billion rupees; they are engaged in the manufacturing of original components for the assembly operation under the deletion program as well as producing reconditioned and original components for sale in the local market. The models of Toyota and Honda 1300cc car has been able to achieve the popularity level among car lovers in Pakistan as the company expected before its import, the companies source told that "The sales of Toyota Corolla and Honda City vehicle have Raised, Before introducing Toyota Corolla/ Honda City 1300cc cars, the Toyota company has completely vanished its most popular brand Corolla, and Honda vanished by Civic whose demand was up throughout the country. The demand for old Corolla cars is still moving up in the second-hand car markets. Common perception about Toyota and Honda is that it Success to fulfill the perceive value of the customer, the price paid is much lower against the value, in our research work we try to identify how strong these arguments are? What are the reason behind to not fulfilling the perceived value of customer, is this marketing or a manufacturing failure, is there any role of imported cars.

13

Installed Capacity of Cars and Light Commercial Vehicles (LCVs):

Capacity unit/annum
Pak Suzuki Motor Co. Ltd, Karachi Public Limited Company with 72.82% shares and management held by Suzuki Motor Corporation, Japan. Indus Motor Co. Ltd, Karachi Joint venture between Habib Group, Pakistan, Toyota Tsusho Corporation, Japan (Toyota and Cuore Honda Atlas Cars (Pak) Ltd, Lahore Joint venture between Atlas Group Pakistan and Honda Motor Co. Japan. Ghandhara Nissan Ltd Technical cooperation agreement with Nissan Motors, Japan. Dewan Farooq Motors Ltd Technical cooperation agreement with Hyundai Corporation, South Korea.

150,000

50,000

20,000

6,000 25,000 251,000

Source: PAMA (Updated to FY. 2007-2008)

The automobile industry of Pakistan has travelled a long road to get to where it is now. The ups and downs, the shifts and turns have buffeted it many a times, but it displayed a resilience that had enabled it to counter adversities that it had come to face with and showed massive growth till 2006 but after that government introduced liberalized import policies TBS in replacement of ISDP which led Auto industry to stagnant growth.

14

The Background of the Project: The background of the topic is to analyze high sales of Toyota in comparison with Honda Cars that success in the Car Market. we will find out the reasons and factors those make Toyota strengthen and Strong position in the market for that we decided to work on it. For that we must need to very closely and detailed overview of the company. Common perception about Toyota and Honda is that both companies have been fulfilling the perceive value of the customer, the price paid is much reliable against the value, in our research work; we will identify how much strong these arguments? What the reason are behind to successfully fulfill the perceived value of customer, what are the marketing or manufacturing success, is there any some other aspects or role to make more loyal customer. Toyota and Honda fulfill the whole of the customers need as they want in every of aspect but customer had already mindset about the price of both different Brand that these cars providing luxurious, reliable, and durable Facilities which other Car manufacturer are not much able to provide at competitive price. Toyota Indus and Honda atlas has been producing luxurious car its time where as customer will be aware to the Toyota and Honda Car with reference to those brand, these brands penetrated in customers mind so Toyota and Honda has been getting a place in car market.

15

Introduction of the organizations business sector: Indus Motors Company (IMC) is the member of PAMA - Pakistan Automotive Manufacturers Association in which all automobile related business companies playing a vital role in the Association. The location of PAMA - Pakistan Automotive Manufacturers Association is the 1st Floor, Block-C, Finance & Trade Centre, Shah-rae- Faisal, Karachi. The PAMA objective is to promote progressive manufacture of automotive vehicles (cars, commercial vehicles, motorcycles, farm tractors) in the country. Toyota Motors produces an estimated eight million vehicles per year, about a million fewer than the number produced by General Motors (world largest automobile Company) The company dominates its home market, with about 40% of all new cars registered in 2004 being Toyotas. Toyota also has a large market share in both the United States and Europe. And Pakistans second largest automobile company somehow Suzuki company gain competitive advantage instead of other automobile companies in Pakistan due to cost leadership strategy and another major advantage is that they are producing 800cc car at economical cost means in Pakistan perspective middle status people are now able to adopt auto at affordable price but if we talk about the 1300cc cars that is majority in Pakistan as well so its advantage goes to Toyota corolla in 1300cc car producing it is the number one automobile company in Pakistan It has significant market shares in several fast-growing South East Asian countries. The - 1 -company produces a large range of vehicles which are highly regarded for their quality, engineering, and value; their designs set global standards for safety, reliability and ease of maintenance. The Company Philosophy

"Do the right thing for the company, its employees, the customer and the society as a whole."

16

The story of Toyota Motor Corporation TMC began in September 1933 when Toyoda Automatic Loom created a new division devoted to the production of automobiles under the direction of the founder's son, Kiichiro Toyoda Soon thereafter, the division produced its first Type A Engine in 1934, which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Production of the Model AA passenger car started in 1936. Although the

Toyota Group is best known today for its cars, it is still in the textile business and still makes automatic looms (fully computerized, of course), and electric sewing machines which are available worldwide.The Indus Motors business Sector has been established in many aspects but in Pakistan they are doing business in automobile industry they are manufacturing many of vehicle like Cars, Jeeps, single cabin, double cabin, 2x4, 4x4, Hilux, Delux, Hiace and many others.

Present Status:
IMC on achieving the milestone of over 50,000 vehicle sales in the year 2007 and appreciated the company for increasing its production capacity to meet the demand for its vehicles. He reiterated Toyota's ongoing commitment and support to IMC for further expanding production facilities and acknowledged the efforts of the Indus Team for continuously improving their skills and their efforts for building quality cars. Indus Motors Company has been impressive 1400 sq meters Training Center, which will provide core trainings as well as multiskill development. Cumulatively, since inception, over a million menhours of training had been done by Indus to enhance the capabilities of its team. Indus Motors company also inaugurated the modern, state of the art, Vehicle Display Center at MakroHabib on Shah-raheFaisal, Karachi, which will display top of the range Toyota vehiclesThe sales and production of Indus Motors Toyota and Daihatsu brands for the year ended June 30, 2008 were 50,802 units and 48,222 units respectively which is a new record compared to last years figures of 50,557 units and 47,821 units respectively. The companys sales revenue increased to Rs 41 billion, up 6% over Rs. 39 billion; with the after tax profit of Rs 2.3 billion, as compared to Rs 2.7 billion

17

achieved during the year ended June 30, 2007. Earnings per share decreased to Rs 29.15, as compared to Rs. 34.93 in the previous year. Nationwide sales of locally assembled passenger cars and light commercial vehicles (LCV) that had previously grown continuously over the last five years declined by 8% to 187,412 units from 204,212 units sold in 2006-07. Production in the industry also declined to 187,644 units for the period ended June 30, 08, down 5.7% over 198,986 units last year. Although there has been a decrease in the import of used cars from 28,493 units in 2006-07 to 13,145 units in 2007-08, they still continue to impede growth of the auto industry.The impact of political uncertainty compounded with a general slow down in the economic environment resulting from rising interest rates, limited credit availability for auto financing, depreciation of the Pak Rupee against major currencies, unprecedented rise in prices of oil, steel and other inputs, inflation, etc impacted the demand negatively. The Board of Directors appreciated the Companys performance and declared a final cash dividend of Rs 6.5 per share, making for a total of Rs 10.5 per share during the year. The total dividend paid for the same period last year was Rs 13 per share. Indus Motor has requested the government to take note of the recommendations made by the Pakistan Automobile Manufacturers Association to accelerate growth of the local industry and withdraw the 5% Federal Excise Duty and increase of 1% Sales Tax, amongst other measures.

18

Indus Motors Company (IMC) Introduction: (Numerical overview) Indus Motors is the country's second largest auto manufacturer, after the Pak Suzuki Motors, located near Bin Qasim Karachi, having an assembling capacity of 55,000 units per annum. Its core business is to manufacture and market cars. In addition, the company also sells auto parts and accessories. Its product line includes 9 variants of Toyota Corolla, 8 variants of Daihatsu Cuore and 2 variants of Toyota Hilux. The company also offers six different imported vehicles namely Toyota Camry, Prado, Land Cruiser, RAV, Hilux and Hiace. Major contributor to the revenue is Corolla, having a contribution of 66.5% in company's sales. Last year, the company has completed its expansion plan that increased its capacity to 55,000 units per annum from 37,000 units earlier. The company has further expansion plan to almost double its capacity to 100,000 units by financial year 2011 for which it has already acquired land. Toyota Motor Corporation of Japan has recently announced its decision to acquire an additional 9.83m shares in Pakistan's Indus Motor Company by taking over stock 3.93m shares (5.0% of the paid up capital) from overseas investors (AG Limited) and remaining 5.90m shares (7.5% of the paid up capital) from general public through a buy-back offer at the purchase price of Rs 370 per share. However, such public offer would not include the stock held by the companies and the individuals, who represent members of the House of Habib (HoH). Toyota Corporation and its affiliate Toyota Tsushu Corporation currently held 9.83m shares each in Indus Motor, which together constituted 25% of the company's paid-up capital. After the said transaction, Japanese giant car maker's stake in Indus Motor Company would raise to 37.5% from currently 25%. New data release by Pakistan Automotive Manufacturers Association (PAMA) after witnessing a growth pattern since FY02 with 6 years CAGR of 28.0% to 171,786 units in financial year 2007 from 39,047 units in financial year 2001, car sales declined by 4.2% in FY08 and stood at 164.65k units as against 171.79k units in financial year 2007. The low price cars category was the beneficiary of this shift in customer preference. The cars with engine capacities of 801cc to 1299cc registered a decline compared with last year. The auto sector in general, has witnessed a slow down owing to the fact that two to three times, the car prices were increased by the auto assemblers during last year in order to support their declining gross margins. Auto assemblers linked the price-hike to the rising prices of steel components and appreciation of the yen against the rupee, which pushed up the production cost further. Moreover, the car financing became

19

more expensive due to increase of 200bps in discount rate during financial year 2008. As a result, there was a slowdown in car financing amid rising mark up rates and tight documentation of car financing due to significant rise in NPLs of the banks. The rising trend of fuel prices also forced the new buyers of small cars to switch to motorcycle mainly due to cheaper cost and low fuel consumption. Among different engine capacity cars, sales volume of low engine capacity cars, i.e., 800cc declined nominally by 0.6% in financial year 2008 over financial year 2007. However, sales volume of high engine capacity cars i.e. 1000cc and above 1300cc declined 11.6% and 15.6% to 48,887 units and 50,824 units in financial year 2008 from 55,295 units and 60,190 units respectively in financial year 2007. FINANCIAL PERFORMANCE (9MTHS'08) Indus Motors announced Rs 1.89 billion PAT (EPS: Rs 24.06) in 9mths'08 compared to Rs 1.93 billion (EPS: Rs 24.53) in 9mths'07, depicting a decline of 1.9%. Major reasons behind the decline were lower sales volume, appreciating Japanese yen against the Pak rupee and higher steel prices, which negatively impacted the company's bottom line. During the period under review, world steel prices grew 11.0% to US $636 per ton (average price) from US $574 per ton (average price) in 9mths'07 whereas Pak rupee depreciated 8.5% against Japanese yen to 1 = Rs 0.561 (average price) in 9mths'08 from 1 =Rs 0.517 (average price) in the same period last year. Financial charges stood at Rs 1 million in 9mths'08 as against Rs 27 million in the corresponding period last year, representing a significant decline of 98.0% as the company did not have any mark up bearing long-term liabilities, except deferred taxation, in its balance sheet. Other income of the company also declined 13.2% to Rs 625 million in 9mths'08 compared to Rs 720 million in the same period last year due to low returns on bank deposits. Income from bank deposits fell to Rs 490.7 million in 9mths'08 as against Rs 608.9 million in the same period last year. Despite adverse market environment, total sales volumes (both CKD and CBU) declined nominally by 0.7% to 36,445 units in 9mths'08 from 36,704 units in the same period last year. However, production at 34,925 units in 9mths'08 was slightly up as against 34,819 units in 9mths'07. In 9mths'08, Indus Motors was the market leader in above 1300cc category with a market share of 65.2% followed by Honda Cars and Pak Suzuki with a market share of 28.3% and 6.5% respectively. Market share of the company has also improved to 65.2% in 9mths'08 from 59.3% in 9mths'07 at the expense of both Honda Cars and Pak Suzuki. However, in 800cc engine capacity cars, market share has depressed to 17.9% from 20.1% in 9mths'07. Financial performance FY07 Indus Motors crossed

20

production of 250,000 units since its inception. It achieved over 50,000 units of sales during the year 2007. Also, dealership network expanded from 25 to 29 dealers. Sales of locally manufactured vehicles and CBU variants for the year ended June 30, 2007 were 50,557 units, compared to 42,406 units last year, up by 19%. Toyota Corolla outperformed its competitor and established a market segment leadership position in Pakistan with 59% market share in the year 2006-07. Daihatsu Cuore increased its share to 26% in 2006-07 from 18% last year in the economy car segment that continues to show impressive growth. The New Generation Camry introduced in the beginning of 2006-07 showed impressive performance. It increased its share from 16% last year, to 54% by June 2007, in its segment. In the new SUV category, market share increased from 62% to 88% this year, with increased focus on fleet customers who are secure in the reliable performance, durability and after sales service and product support capability of Indus. Hiace and Hilux increased market share from an already impressive 63% last year to a market dominant position of 84% this year. Indus Motors' liquidity has maintained a positive trend, over the past 5 years, with the current ratio being well above the industry averages, increasing progressively with each successive year. The current ratio touched 1.8 in financial year 2007 showing the excessively liquid assets that the company owns. Indus Motors fares reasonably above the industry average in terms of inventory turnover; this being a virtue of its continuous innovation, and understanding and catering to the market needs. However, in terms of collection of receivables IMC lags behind its competitors. Although the operating cycle is decreasing, but showing efficiency in terms of its cash conversion cycle, it needs to bolster it further to be at par with the industry standards. The total assets turnover is better than the industry, showing that the company is better off than its rivals, as far as managing assets to generate sales is concerned. The rising net sales have a major role to play in elevating this measure of asset management, and this can be attributed to better marketing, launching of newer models of cars, and improved delivery timings. As depicted by the graph, the TATO has shown quite a profound increase in financial year 2007. Lately, however, the sales-to-equity ratio of Indus Motors has been declining. This can be attributed to an increase in reserves that may be used to further expand the company's capacity according to the AIDP (Auto Industry Development Plan). Financial year 2007 has thus, retained the previous trends of the company's

21

asset management ratios. All in all, asset management ability of the company is praiseworthy. Long term debt-to-equity is lower than the industry average. It is almost zero owing to the fact that the company has no long term liability as such. Indus Motors is basically an equity-based company.

22

Mission Statement of Indus Motors Company

"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".

The most respected. The most successful. Delighting customers. Wide range of products. The best people. The best technology.

23

Vision statement of Indus Motors Company:

Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world.

24

Honda in Pakistan

25

Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan.Honda Motors Company was established on September 24, 1948 under leadership of the then C.E.O. Tako Fukui. Its head office is in Tokyo. It started operations in Pakistan as Honda Atlas Company, a joint venture between Honda Motors Company and Atlas Group of Companies on November 1992. It supports more than 137,827 employees world over. The company was incorporated on November -, 1992 and joint venture agreement was signed on August1993.The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed.

The first car rolled off the assembly line on May 26, 1994. Official inauguration was done by President of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr.Kawamoto, President of Honda Motor Company Limited Japan was also present to grace the occasion. The company is listed on Karachi, Lahore and Islamabad Stock Exchanges. On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and Islamabad. Since then the Dealerships Network has expanded and now the company has sixteen 3S (Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pitstops network in all major cities of Pakistan. Since the commencement of production in 1994 till March31, 2005, the company has produced and sold over 77,500 cars. All dealerships are constructed in accordance with the standards defined by Honda World over.

26

Percentage of local parts conforms to the government's policy. Local vendors are continuously patronized to develop parts locally. The quality of local parts is thoroughly checked to meet stringent international standards. We always strive to give outstanding service to our valued customers. In addition to providing regular service to customers, the company also regularly conducts Service Campaigns, to facilitate customer's need for service. This has given our customers absolute confidence in our cars, clearly evident from the ever-increasing sale volumes. It is the constant endeavor of Honda Atlas Cars (Pakistan) Limited to achieve No .1 Customer satisfaction. Honda Atlas Cars (Pakistan) Limited is committed to meet customer expectations, and to provide good value for money. Currently we are offering 8 different models of Honda CIVIC and CITY cars in wide range of colors with unique technological and other features

Vision
27

Focusing on satisfaction(customers Associates and Shareholders) with Challenging spirit and flexibility, we are Dedicated to supplying latest generation cars with advanced technology, greater fuel efficiency and competitive prices, along with friendly and efficient after sales backup, maintaining quality as core of all activities.

28

Mission

To be a dynamic, profitable and growth oriented company through market leadership, excellence in quality and service adding value to the shares and maximizing exports. To give attractive return to business associates, share-holders as per their expectations and market value and employees according to their abilities and performance, and to be good corporate citizen to fulfill its social responsibilities.

29

Products of HONDA
Honda offers different products, which are as follows;

ACCORD

Witness the debut of the astonishing new Honda Accord: the outcome of our all-out pursuit of sedan excellence, successfully uniting all contradictory elements. A bold exterior presence with a luxury air, yet a sporty youthful feeling. An expansive upper-class cabin with comfortable travel space for five adults and panoramic visibility. A larger body with sportier performance than ever before, and powerful i-VTEC engines designed for high fuel economy. A renowned global car with all advanced Honda technologies for driving command, plus eco-performance for increased recyclability. And, Honda's world-leading safety protection, which even extends to pedestrians and those in other vehicles. Experience its overall quality, riding comfort, and details for yourself, and you'll know why the new Accord represents a distinct "status upgrade" for the sedan.

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CIVIC
What moves you? What drives you? What excites you? Honda seeks the pinnacle of technology in pursuit of answers. Now, we present a bold way to stir the body and soul, designed to quicken the pulse at first glimpse, and stimulate the senses with each and every encounter. The sporty new Honda Civic possesses rare spirit, and so do you. See, touch, feel, drive and discover.

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CITY

See it coming, like an arrow. Striking good looks, cutting-edge design, sharply focused tension. See it shoot straight ahead. What is it? Discover the compact sedan breakthrough with strength to open a new era and outlast fleeting trends. Sleek styling and strong performance, with swift, gutsy response to the driver's pedal action. Class-leading* spaciousness and relaxing ride for outstanding comfort. Imagine the pride of driving and owning this distinctive new-generation standard. Get ahead in the new City. People will be watching. *1.3-liter compact sedan class Euipments & Specifications may vary in some cases.

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CR-V
Dynamic styling appeal. Elevated SUV outlook. Premium driving refinement. And an exhilarating yet stable feeling. The new Honda CR-V has all you want, and more. A spacious cabin and utilities, due to packaging innovation. Plus superb i-VTEC response, quietness, and safety. Discover delightful CR-V driving. Now, all roads are exciting.

Products of Toyota
33

Toyota offers different products, which are as follows;

Cuore

34

Vitz

XLI

35

GLI

Saloon

36

2D

CAMRY

37

PARADO

Land Cruiser

38

Sales of Toyota against Honda

JULY 09 TO DEC 09
18180 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 CITY CIVIC COROLLA SUZUKI LIANA 2402 544 3463

SOURCES: PAMA

39

PROBLEM STATEMENT

This research was conducted to find out the THE REASONS THAT WHY TOYOTA SHARE IS MORE THAN THE SHARE OF
HONDA?

We have used the field study method for our research. This method was most suited to our area of study because relevant information could be gathered in the actual environment. Various researches have been conducted in the past to find out the reasons of this problem statement concluding that brand image has an affect on the sales of cars. So, we are going to find out that is Toyota has more sales because of brand image or there is any other reason.

40

SAMPLE QUESTIONNAIRE
Reasons for higher TOYOTA share in market as compared to HONDA

Name _________________

Gender male female

Age

Under 20 20 -40 40 & above

1. Which car you drive for yourself? Toyota Honda Both

None

2. Which automobile company would you prefer to travel? Toyota Honda Both None

3. Whose products are more often seen on roads? Toyota Honda Both None

4. Whose products are more stylish? Toyota Honda Both

None

5. Whose looks are more luxurious? Toyota Honda Both

None

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6. Who do you think is more reliable to travel? Toyota Honda Both None

7. Which automobile do you think has more resale value in the market? Toyota Honda Both None

8. Which companys service centers are more in numbers? Toyota Honda Both None

9. Whose products are more environments friendly? Toyota Honda Both None

10. Whose interior is more attractive? Toyota Honda Both

None

11. Toyota spare parts are readily available in the market? Agree Disagree No idea 12. Do you think that Toyota products are more economical than Honda? Agree Disagree No idea

12. People prefer Toyota because of its variety of models? Agree Disagree No idea

13. People prefer Toyota because of its diesel engine? Agree Disagree No idea

14. Shock problem rumor of Honda is a hurdle in its market share? Agree Disagree No idea

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15. Toyota market share is more because it is targeting low income group and Honda does not? Agree Disagree No idea

16. Do you think that brand loyalty of Toyota is more than Honda? Agree Disagree No idea

17. Do you prefer Toyota because of its color range? Agree Disagree No idea

18. Toyota offer better engine efficiency than Honda? Agree Disagree No idea

19. Which will you recommend HONDA/TOYOTA and why? ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________

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QUESTIONNAIRE ANALYSIS

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WHICH CAR YOU DRIVE FOR YOURSELF?

This question has been taken as the filter question for the research purpose. As we are finding the reasons that why the Toyota share is more than Honda so before getting any opinion from our respondents we need to know whether that person is using any of these two cars or any other. If that person isnt using any cat than its opinion will not be worthy because he might be ignorant about the cars. All the opinion given on the questionnaire by that person will be based on the guess work that will not truly be real information that we need. So if any person who has driven the car will be asked to fill the questionnaire so that the information we get through will be really based on the truth basis.

OPTIONS
We have given the options as follows

Toyota

Honda

Both

None

A person can be a user of Toyota products or Honda or he might have used both. The last option NONE will give two motions i.e. the person might be using any other companys product or he might havent used any car yet. If he is a user of both then his information will be real critical one because he has used both and will have real experience.

GRAPHICAL REPRESENTATION

QUESTION NO1
60 50 40 30 20 10 0 TOYOTA HONDA BOTH NONE 23.9 13.4 19.4 52.2

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WHICH AUTOMOBILE COMPANY WOULD YOU PREFER TO TRAVEL?

This question is added in the questionnaire so that we get the intention that which automobile companys people will like to prefer to travel. This will tell us in real sense that if the people who are driving other automobile products can express that whether they like Toyota or Honda. That person might be using any other companys product because of any reason but internally he might be looking to drive Honda or Toyota. It can be taken as the question or the psyche of the people that what they believe internally about these two companies i.e. Toyota / Honda. This question is also important that some persons might be using Toyota but they like Honda and vice versa or they might not like any of these two.

OPTIONS
We have given the options as follows

Toyota

Honda

Both

None

The people might prefer Toyota or Honda. There might be people who like the both thats why they might be selecting BOTH. Finally people might not prefer any of these two so they will go for the last option.

GRAPHICAL REPRESENTATION

QUESTION NO 2
70 60 50 40 30 20 10 0 TOYOTA HONDA BOTH NONE 25.4 10.4 0 64.2

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WHOSE PRODUCTS ARE MORE OFTEN SEEN ON ROADS?

This question is added because it will provide us with the factual data about what people see on the roads while driving. U can see that Toyota products might be more or Honda products might be more. But this will give us the intentional thinking of the people i.e. what they perceive on the roads. If they are more inclined towards the Toyota they will say that Toyota products are more often seen on the roads and vice versa. In real sense this question might be leading towards the brand loyalty of the people.

OPTIONS
We have given the options as follows

Toyota

Honda

Both

None

The person who will be selecting Toyota means that he is inclined towards Toyota whether he is using it or not and the same is the situation if he selects the option of the Honda. On the other hand the other two options are also there i.e. the person may be of the opinion that both type of products are more often seen on the roads. lastly any one can be of the view that none of these two is more often seen on the roads.

GRAPHICAL REPRESENTATION

QUESTION NO 3
60 50 40 30 20.9 20 10 1.49 0 TOYOTA HONDA BOTH NONE 25.4 52.2

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WHOSE PRODUCTS ARE MORE STYLISH?

While drafting this question the basic idea in the back of the mind of my group members was to perceive and conceive that which automobile company is offering more stylish products. As stylish products are the means of attraction to the general public and the major reason for acquiring the products to use by the general public.Stylish products will result in the higher sale to the company as it will also lead the accurate reason know that which company has the highest share in the market.

OPTIONS:

Toyota

Honda

Both

None

GRAPHICAL REPRESENTATION:

QUESTION NO 4
80 70 60 50 40 30 20 10 0 TOYOTA HONDA BOTH NONE 5.97 1.49 23.9 68.7

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WHOSE LOOKS ARE MORE LUXURIOUS?

The looks of any car has always impact on the customer. Many of the customers are looks conscious than any thing else in the car. Therefore the looks that seem to be luxurious are more important to some of the customers at times. People perceives that if there car is fantastic in their looking then they will also be looking luxurious while driving this may lead to purchase of that type of car that they feel is luxurious. Some may find the products of the Toyota to be the luxurious and other may feel the same for Honda. It depends on the mentality of the persons what they perceive.

OPTIONS
We have given the options as follows

Toyota

Honda

Both

None

These options are given above may lead to any of the response. If the option Toyota is selected then it means that respondent feel that Toyota products are those that he feel are luxurious and meets its needs. Same is with Honda. There can be that feel that both the Toyota and the Honda are luxurious in nature so that respondent will go for that.

GRAPHICAL REPRESENTATION

QUESTION NO 5
80 70 60 50 40 30 20 10 0 TOYOTA HONDA BOTH NONE 5.97 0 25.4 68.7

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WHO DO YOU THINK IS MORE RELIABLE FOR TRAVEL?

In this question the basic knowledge we want to collect from the general public is to now that which company the people think are more reliable when it come to traveling.This question will lead to us to the conclusion that when we talk about reliability and commitment people prefer which company for traveling and transportation.

OPTIONS:

Toyota

Honda

Both

None

GRAPHICAL REPRESENTATION:

QUESTION NO 6
50 45 40 35 30 25 20 15 10 5 0 44.8 37.3

17.9

0 TOYOTA HONDA BOTH NONE

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WHICH AUTOMOBILE DO YOU THINK HAS MORE RESALE VALUE IN THE MARKET?

The basic idea behind this question is to gather the fact that which automobile company has more resale value in the secondary market. This reason is the major contributor to the higher share of the automobile company in the local market. As people prefer those products that have good re sale value at the time of selling under any situational circumstances.

OPTIONS:

Toyota

Honda

Both

None

GRAPHICAL REPRESENTATION:

QUESTION NO 7
70 60 50 40 30 20 10 0 TOYOTA HONDA BOTH NONE 16.4 19.4 62.7

1.49

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WHICH COMPANYS SERVICE CENTERS ARE MORE IN NUMBERS?

The concept of asking this question in the questionnaire is to find out the reason that whether people are inclined towards the fact that the availability of there service centre of the companys. This question will give us with the internal state of the persons mind that if the he purchases Toyota and Toyota service centre are more in no then in any case his car makes the default then he will be satisfied to have his car repaired from the original service centres.

OPTIONS
We have given the options as follows

Toyota

Honda

Both

None

These options are given above may lead to any of the response. If the option Toyota is selected then it means that respondent feel that Toyota products offer better interior. Same is with Honda. There can be situation that respondent feels that both the Toyota and the Honda are offering good interior so that respondent will go for option both. GRAPHICAL REPRESENTATION:

QUESTION NO 8
45 40 35 30 25 20 15 10 5 0 TOYOTA HONDA BOTH NONE 7.46 28.4 22.4 41.7

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WHOSE PRODUCTS ARE MORE ENVIRONMENTS FRIENDLY?

While drafting this question the basic idea in the back of the mind of my group members was to perceive and conceive that which automobile company is offering products that are more environments friendly and produces less pollution. Now days global warming and other hazards are very commonly discussed in the general public and a lot of NGOS are working on the awareness of the hazards to the mother earth. Thats why company and people are loyal and attracted towards the products that are more environments friendly and is fewer hazards to the nature.

OPTIONS:

Toyota

Honda

Both

None

GRAPHICAL REPRESENTATION:

QUESTION NO 9
40 35 30 25 20 15 10 5 0 TOYOTA HONDA BOTH NONE 5.97 22.4 37.3 34.3

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WHOSE INTERIOR IS MORE ATTRACTIVE?

The interior of the car has always a great impact on the comfort ability and the looks of the car. Many people believe that the interior of the car must be attractive and thats why they are attracted towards the cars that offer more variety and the interesting eye catching interior. Therefore its a key factor in the purchase of the car by any buyer. So the interior must be attractive to catch the buyers.

OPTIONS:

Toyota

Honda

Both

None

GRAPHICAL REPRESENTATION:

QUESTION NO 10
80 70 60 50 40 30 20 10 0 TOYOTA HONDA BOTH NONE 14.9 10.5 0 74.6

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TOYOTA SPARE PARTS ARE READILY AVAILABLE IN THE MARKET?

This question is added in the questionnaire that n case of any problem with any genuine part of the cars people pursue that they get the original part thats the psyche of the user. So if the spare parts of Toyota are readily available in the market then the user will be satisfied in a way that the efficiency of its automobile isnt going to be affected because of the availability of the genuine spare parts. So this can be the major reason of the buying of the Toyota by the user.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

Since its a statement with which the respondent may agree or not thats why these options are added in the questionnaire. If the respondent agrees with the statement then there is a possibility that the respondent has purchase the Toyota product because of the availability of the genuine spare parts. On the other hand there might be the situation that respondent doesnt agree with the statement and thats why respondent selects the option of disagree. In the last the respondent might have no idea about this.

GRAPHICAL REPRESENTATION :

QUESTION NO 11
70 60 50 40 30 20 10 0 AGREE DISAGREE NO IDEA 16.4 20.9 62.7

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DO YOU THINK THAT TOYOTA PRODUCTS ARE MORE ECONOMICAL THAN HONDA?
The price factor is always the key factor for all the things and same is the situation with the prices of the automobile products. Price factor is a major hurdle for fixed salaried persons all the time. They are more price conscious because of their salary range. If the Toyota products are economical then the salaried category of the people will be purchasing the Toyota products. And most of the persons in Pakistan are salaried persons so that can be the major reason for more sales of Toyota as compared to Honda.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

Since its a statement with which the respondent may agree or not thats why these options are added in the questionnaire. If the respondent agrees that the prices of the Toyota are economical then the respondent has purchase the Toyota product because of this factor. On the other hand there might be the situation that respondent doesnt agree with the statement and thats why respondent selects the option of disagree. In the last the respondent might have no idea about this.

GRAPHICAL REPRESENTATION

QUESTION NO 12
80 70 60 50 40 30 20 10 0 AGREE DISAGREE NO IDEA 7.46 23.9 68.7

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PEOPLE PREFER TOYOTA BECAUSE OF ITS VARIETY OF MODELS?

Man is not satisfied with whatever he had. He is always there for new and new things. He isnt satisfied with what he has with him. Same is the case in this matter i.e. the people arent satisfied with the single type of cars with a very little range of variety. Users need the variety the more you provide the variety the more the customers you have with you. In other words the sales of the companies are also dependent on the variety of their products because users dont want to remain with the same thing for a longer period of time.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

People may agree with our statement that yes Toyota offers more variety of products to its customers thats why there sales is higher than the sales of Honda. On the other hand there is equal chance that the respondent will state that the Toyota doesnt offer much variety of the products. Or in the end the respondent might not have any idea about the variety of the models so he will be selecting the last option.

GRAPHICAL REPRESENTATION
70 60 50 40 30 20 10 0 AGREE DISAGREE NO IDEA 1.49 32.8 65.7

QUESTION NO 13

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PEOPLE PREFER TOYOTA BECAUSE OF ITS DIESEL ENGINE?

The availability of the diesel engine of the Toyota can be the major and the very important factor of higher sales of Toyota as compared to Honda. Diesel engines are very much necessary for the users who are living in rural areas where the availability of the petrol isnt good. On the other hand the hilly areas of Pakistan like NWFP, NORTHEN AREAS and the areas of Kashmir are very much difficult to travel. The cars and other automobile sectors over there need more power and that power requirement can only be met by the diesel engines because the diesel engines are more powerful than the petrol engines.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

People may agree with this statement and they may not. The persons who are belonging to the rural areas and the hilly areas can greatly understand this question in real way because they see this trend in their areas quiet often.

GRAPHICAL REPRESENTATION

QUESTION NO 14
60 50 40 30 20 10 0 AGREE DISAGREE NO IDEA 28.4 17.9 53.7

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SHOCK PROBLEM RUMOR OF HONDA IS A HURDLE IN ITS MARKET SHARE?

It has been noticed in that a rumor is in the area from the July of the last week that there is a problem with the shocks of Honda products. This can be the big hurdle because of which the sales of Honda arent picking up in the market thus leading to an edge to the competitor i.e. Toyota. Rumors has always have a great impact on the psyche of the persons so that hold a person to not to go towards the purchase of Honda. In other words Toyota can cash this rumor in great way and as per the factual data Toyota has cashed it already in real way.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

The respondent when agree will be giving us the intention in real terms that he has heard this rumor so he some what believes on it also thats why he is agreeing with the statement. If the respondent doesnt agree he will simply disagree. On the last the respondent might be unaware of the rumor.

GRAPHICAL REPRESENTATION

QUESTION NO 15
45 40 35 30 25 20 15 10 5 0 AGREE DISAGREE NO IDEA 29.9 31.3 38.8

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TOYOTA MARKET SHARE IS MORE BECAUSE IT IS TARGETING LOW INCOME GROUP AND HONDA DOES NOT?
Since all the automobile products are costly so it there is a strategy made by the company to target he low income level with a new range of products then it can be very much effective to boos the sales of the company. Since the most of the nation in Pakistan is at low income level do in this way any company will be targeting a wide range of the market segment. The more the target segment the more is the sales and the more is the profit. This strategy is very much important for all the companies.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

Since its a statement with which the respondent may agree or not. If the respondent agrees that the prices of the Toyota are economical and it is targeting the low income level persons then the respondent has purchase the Toyota product because of this factor. On the other hand there might be the situation that respondent doesnt agree with the statement and thats why respondent selects the option of disagree. In the last the respondent might have no idea about this.

GRAPHICAL REPRESENTATION

QUESTION NO 16
60 50 40 30 20 10 0 AGREE DISAGREE NO IDEA 11.9 32.8 55.2

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DO YOU THINK THAT BRAND LOYALTY OF TOYOTA IS MORE THAN HONDA?

Brand loyalty is the major factor related to the purchase of the cars. Once the loyalty is grown it is very much difficult for any one to change the loyalty of anyone. If any person has associated his loyalty with Honda then he will pursue to purchase the Honda and vice versa. This creation of loyalty is real critical process. The more the customer is satisfied the more it contributes towards the loyalty of the brand. Several other factors are of key importance in brand loyalty. So if the person is more loyal towards Honda then he will be rejecting the statement.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

People may agree with our statement that yes Toyota users are more brand loyal thats why there sales is higher than the sales of Honda. On the other hand there is equal chance that the respondent will state that the Toyota dont have more brand loyalty. Or in the end the respondent might not have any idea about the loyalty of the Toyota so he will be selecting the last option.

GRAPHICAL REPRESENTATION

QUESTION NO 17
50 45 40 35 30 25 20 15 10 5 0 46.3 40.3

13.4

AGREE

DISAGREE

NO IDEA

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PEOPLE PREFER TOYOTA BECAUSE OF ITS COLOR RANGE?

Color is always important factor in the choice of any thing. Same is the case in the purchase of cars. Females are always attracted towards the color range of the cars Toyota offer vide variety of colors that can be the real factor in the purchase of cars. On the other hand of your desired colors isnt there in the product that you like then there is a possibility that you will shift towards the other brand in which that color is available. So more color range the more the market share leading to the higher profits.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

People may agree with our statement that yes Toyota offers more variety of colors to its customers thats why there sales is higher than the sales of Honda. On the other hand there is equal chance that the respondent will think that the color range doesnt make any difference in the purchase of products. Or in the end the respondent might not have any idea about the variety of the models so he will be selecting the last option.

GRAPHICAL REPRESENTATION

QUESTION NO 18
70 60 50 40 30 20 10 0 AGREE DISAGREE NO IDEA 5.97 34.3 59.7

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TOYOTA OFFER BETTER ENGINE EFFICIENCY THAN HONDA?

Engine efficiency can be an important factor in the purchase of the product because if product matches all the other factors that are needed by the purchaser but the efficiency isnt good one then it may change the decision. Especially this has more effect on low and fixed income group people. This may lead to a negative image on the user that will create a negative impact in the market ahead and some other negative rumors alike. So this question is a technical one thats why its added in the questionnaire.

OPTIONS
We provided the following options to the respondent

Agree

Disagree No idea

Since its a statement with which the respondent may agree or not. If the respondent agrees that the engine efficiency of Toyota is more than Honda then the respondent has purchased the Toyota product because of this factor. On the other hand there might be the situation that respondent doesnt agree with the statement and thats why respondent selects the option of disagree. In the last the respondent might have no idea about this.

GRAPHICAL REPRESENTATION

QUESTION NO 19
60 50 40 30 20 10 0 AGREE DISAGREE NO IDEA 8.96 47.8 43.3

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WHICH WILL YOU RECOMMEND HONDA/TOYOTA AND WHY?

In the end we have added the subjective question in the questionnaire to get the information that we havent added in it but the respondent thinks it as a critical factor towards this research.

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CONCLUSION:
The reasons that can be given to provide justification to our conclusion are as follows: In present society and living way, the Brands not only represent the symbol of the company or product but to a larger extent define the general life of a person. What the person uses can reflect his taste of life, his status in the society, his economic background and many other things. This makes a deep connection between the company and its brand, with the consumer. In this two way relation both are dependent on each other for various different reasons. Customers purchase the specific brand things just due to the brand name. Customers believe that brand name is a symbol of quality. We came to the conclusion that when consumer purchases a car, brand names influence his choice. Customers choose the well known car brand. The brands of Toyota which are of real attention and attraction i.ie PARADO and LAND RUISER has great impact on the psyche of the people. People purchase Toyota while having an idea in their mind that believes to the class of executive. More over its very much clear that Toyota has also small cars like VITZ for the a bit low standard customers thats where it gain advantage over Honda in the market. On the other hand the another major factor that always gives Toyota an importance in he minds of majority of the people who live in village is the diesel engine that Toyota offers but Honda doesnt. in the northern areas, NWFP and AJK which is the hilly area of Pakistan and requires more effort from the engines and this demand is met by the Toyota. So this is a major portion of the market that Honda doesnt have much capability to capture. The resale value factor is also influencing the minds of the people majority of the people believe that Toyota is offering more resale value in the market so they will prefer to purchase that thing that will be offering more value in the market when they are going to sell it back. The study shows that Toyota and Honda City brands have a great place in consumer mind, when customers go for purchasing a car, they prefer by that creative perception. Honda is less loyal to customer due to its high cost, low reliability, low performance, and lack of 3S availability, high cost of maintenance and Spare Parts and shape as compare to Toyota. Honda City model 2005 was highly drop down because the car shape was did not appreciated in Pakistan moreover it was

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also failed in specific duration because of side mirror of the car the reason was that the side mirror was resisted by pillar of front quarter window which customer felt uncomfortable when he/she viewed back side. These problems had been shifted from the loyal brand. If a Customers delighted by Toyota he/she does not want to try Honda City car because they have no much information about it and vise versa. we feel that the purpose of this study has been fulfilled to some extant. The theory describe that brand name has a power, which attracts the customers towards branded products. The reason is that customer gets special connection with specific brands product and become the loyal with brand and we founded that Toyota attracts more people.

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Recommendation:
In the light of entire project we would like to highlight some recommendation we found that in the light of brand loyalty Toyota and Honda gaining more and more competitive advantage because it purely involved according to the Pakistan environment but Honda has some weaknesses which Indus Motors Company has to keep on focusing in the customers point of view like The shape of car as customer perceive need to be changed by the Toyota by especially and for Honda also because people believe that every new model of Toyota is like the old one. Interior of the car of Toyota, which mostly people of Pakistan do not much like, needed to be changed. The Honda Atlas Company has to facilitate customers more than Indus Motors Company in term of addition of dealership, Make possible to facilitate customer by 3S, if possible, addition of 2S as well as they providing 2S service for other products. Indus Motors Company has to establish 2S for compete the Pak SUZUKI because Pak Suzuki is the largest automobile company in Pakistan and its cars are highly appreciated because of economical price. Honda Atlas Company has to improve its quality sales, service because the brand loyalty is sustained by truth, fairness, good dealing, and friendly attachment with loyal customer.

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Bibliography : The following websites were quiet helpful for us in collecting relevant information that was helpful in conducting our research.

www.pama.com www.indusmotors.com www.honda.com.pk www.scribd.com www.google.com www.weikipedia.com www.msn.com/images

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