"When you can leave black marks from the exit

of every turn to the braking points of the next

turn, then you have enough horsepower."

"Horsepower is how fast you hit the wall.

Torque is how far the wall moves after you hit
it."

Introduction
Toyota Motor Corporation, Japan's #1 carmaker, has a driving ambition to become
greener. Its gas-powered cars, pickups, minivans, and SUVs include such models as
Camry, Corolla, 4Runner, Land Cruiser, Sienna, the luxury Lexus line, the Scion brand,
and a full-sized pickup truck, the V-8 Tundra. Toyota also makes forklifts and
manufactured housing, and offers consumer financial services. Once a dark horse in the
global automotive game, Toyota has already passed Chrysler and Ford and is closing in
on General Motors.

Toyota Motor Corporation a multinational corporation headquartered in Japan, is the

world's largest automaker in terms of sales volume. As of 2008, Toyota employs
approximately 316,000 people around the world in comparison to second ranked
automaker General Motors' 266,000 employees. Toyota ranks as the World's fifth largest
publicly traded company, ahead of ninth ranked competitor General Motors, according to
Fortune Magazine's Global 500.

In 1934, while still a department of Toyota Industries, it created its first product Type A
engine and in 1936 its first passenger car the Toyota AA. The company was eventually
founded by Kiichiro Toyoda in 1937 as a spin off from his father's company Toyota
Industries to create automobiles. Toyota currently owns and operates Lexus and Scion
brands and has a majority shareholding stake in Daihatsu Motors,[6] and minority
shareholdings in Fuji Heavy Industries Isuzu Motors, and Yamaha Motors. The company
includes 522 subsidiaries.[7]

Toyota is headquartered in Aichi, Nagoya and in Tokyo. In addition to manufacturing

automobiles, Toyota provides financial services through its division Toyota Financial
Services and also creates robots. Toyota Industries and Finance divisions form the bulk of
the Toyota Group, one of the largest conglomerates in the world.
Name

Vehicles were originally sold under the name "Toyoda" from the family name of the
company's founder, Kiichiro Toyoda. In September 1936 the company ran a public
competition to design a new logo. Out of 27,000 entries the winning entry was the three
Japanese katakana letters for (Toyoda) in a circle. But Risaburo Toyoda, preferred
"Toyota" because it took eight brush strokes (a fortuitous number) to write in Japanese,
was visually simpler (leaving off two ticks at the end) and with a voiceless consonant
instead of a voiced one. Since "Toyoda" literally means fertile rice paddies, changing the
name also helped to distance the company from associations with old fashioned farming.
The newly formed word was trademarked and the company was registered in August
1937 as the "Toyota Motor Company".

History

In 1933, Toyoda Automatic Loom Works created a new division devoted to the
production of automobiles under the direction of the founder's son, Kiichiro Toyoda.
Kiichiro Toyoda had traveled to Europe and the United States in 1929 to investigate
automobile production and had begun researching gasoline-powered engines in
1930.Toyoda Automatic Loom Works was encouraged to develop automobile production
by the Japanese government, which needed domestic vehicle production partly due to the
worldwide money shortage and partly due to the war with China. In 1934, the division
produced its first Type A Engine, 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. Early vehicles bear a striking resemblance to the Dodge Power Wagon
and Chevrolet, with some parts actually interchanging with their American originals.

Although the Toyota Group is best known today for its cars, it is still in the textile
business and still makes automatic looms, which are now computerized and electric
sewing machines which are available worldwide.
Toyota Motor Co. was established as an independent and separate company in 1937.
Although the founding family's name is Toyoda, the company name was changed in order
to signify the separation of the founders' work life from home life, to simplify the
pronunciation, and to give the company a happy beginning.

During the Pacific War (World War II) the company was dedicated to truck production for
the Imperial Japanese Army. Because of severe shortages in Japan, military trucks were
kept as simple as possible.

After the war, commercial passenger car production started in 1947 with the model SA.
In 1950, a separate sales company, Toyota Motor Sales Co., was established (which lasted
until July 1982). In April 1956, the Toyopet dealer chain was established. The following
year, the Crown became the first Japanese car to be exported to the United States and
Toyota's American and Brazilian divisions, Toyota Motor Sales Inc. and Toyota do Brasil
S.A., were also established.

Toyota began to expand in the 1960s with a new research and development facility, a
presence in Thailand was established, the 10 millionth model was produced, a Deming
Prize and partnerships with Hino Motors and Daihatsu were also established. The first
Toyota built outside Japan was in April 1963, at Port Melbourne in Australia.[19] By the
end of the decade, Toyota had established a worldwide presence, as the company had
exported its one-millionth unit.

With high gas prices and a weak US economy in the summer of 2008, Toyota reported a
double-digit decline in sales for the month of June, similar to figures reported by the
Detroit Big Three. For Toyota, these were attributed mainly to slow sales of its Tundra
pickup, as well as shortages of its fuel-efficient vehicles such as the Prius, Corolla and
Yaris. In response, the company has announced plans to idle its truck plants, while
shifting production at other facilities to manufacture in-demand vehicles.
Toyota Philosophy

Toyota's management philosophy has evolved from the company's origins and has been
reflected in the terms "Lean Manufacturing" and Just In Time Production, which it was
instrumental in developing. The Toyota Way has four components: 1) Long-term thinking
as a basis for management decisions, 2) a process for problem-solving, 3) adding value to
the organization by developing its people, and 4) recognizing that continuously solving
root problems drives organizational learning.

World Wide Presence

Toyota has factories all over the world, manufacturing or assembling vehicles for local
markets, including the Corolla. Toyota has manufacturing or assembly plants in Japan,
Australia, India, Canada, Indonesia, Poland, South Africa, Turkey, the United Kingdom,
the United States, France, Brazil, Portugal, and more recently Pakistan, Argentina, Czech
Republic, Mexico, Malaysia, Thailand, China, Vietnam, Venezuela, the Philippines, and
Russia.

In 2002, Toyota initiated the "Innovative International Multi-purpose vehicle" project

(IMV) to optimize global manufacturing and supply systems for pickup trucks and
multipurpose vehicles, and to satisfy market demand in more than 140 countries
worldwide. IMV called for diesel engines to be made in Thailand, gasoline engines in
Indonesia and manual transmissions in the Philippines, for supply to the countries
charged with vehicle production. For vehicle assembly, Toyota would use plants in
Thailand, Indonesia, Argentina and South Africa. These four main IMV production and
export bases supply Asia, Europe, Africa, Oceania, Latin America and the Middle East
with three IMV vehicles: The Toyota Hilux (Vigo), the Fortuner, and the Toyota Innova.
Brands

Following are the current Toyota Brands

Cars

• Yaris
• Corolla
• Matrix
• Camry
• Camry Solara
• Prius
• Venza
• Avalon

Trucks

• Tacoma
• Tundra
• Hilux (VIGO)

SUVs and Vans

• Rav4
• FJ Cruiser
• Highlander
• Sequoia
• 4Runner
• Land Cruiser
• Sienna
Hybrids

• Prius
• Camry Hybrid
• Highlander Hybrid

Operations in Pakistan

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. It also has a wide range of
imported vehicles.

Toyota Corolla-Be an Icon

A ride becomes more when it makes your arrival a reception, when it creates your
impression before you get off. Be in a sense of respect & regard exalted as never before.

It isn't a trendy sport utility vehicle or pickup truck. It isn't fancy. But after more than 30
years in the American market, the Toyota Corolla annually attracts 250,000 new-car
buyers who need economical and durable transportation. In Pakistan, over 25,000 cars are
sold every year, way more than any other competitor.

Following are some of the comments from consumers regarding the new Corolla:

• "The revised 1.8-liter engine offers a few more horsepower. More importantly for
the Corolla’s target market, it’s noticeably quieter. Given Toyota four-cylinder
engines’ long, flat torque curves and the car’s intended mission in life, the four-
speed automatic is adequate. With improved sound insulation and a soft ride, the
Corolla is truly the Lexus of small car freeway cruisers.
• Shouldn’t everyone make a car like a corolla?
• I used to own a ford focus, the BEST HANDLING car in its class when
introduced. The corolla I have now, fitted with aftermarket +1 tires and rims,
actually outhandles the focus.

SWOT Analysis

Strengths
 • The biggest strength of Toyota Corolla is the JUST IN TIME philosophy of
Toyota. Just in Time spirit implies two opposing forces of providing fast and
flexible response, yet building mechanisms and systems that are efficient and
waste-free. The concept is to provide the right product and information, at the
right time, in the right amount, in the right manner, while maintaining high
standards of efficiency and cost control. JIT has resulted in ZERO inventory
and immense cost savings.
• Toyota Corolla has one of the best SSS (Sales, Service, Spare parts) networks
in Pakistan. Apart from official dealers, every mechanic in every part of the
country also boasts the fact that he can repair a Corolla. The spare parts are
available in every corner of Pakistan. The engine is easy to understand and to
repair. This has increased the sales of Toyota Corolla outside the major cities
and in rural areas immensely.

Weaknesses

• The biggest weakness of Toyota Corolla in Pakistan is the below average quality
of its components. As compared to Japan assembled Corolla, the Pakistan
assembled Corolla often comes with various manufacturing defects like leakages,
improper fixings and use of low quality materials.
• The company needs to keep producing cars in order to retain its operational
efficiency. Car plants represent a huge investment in expensive fixed costs, as
well as the high costs of training and retaining labor. So if the car market
experiences a down turn, the company could see over capacity. If on the other
hand the car market experiences an upturn, then the company may miss out on
potential sales due to under capacity i.e. it takes time to accommodate. This
happened to Toyota Indus Motors In the past few years when the sales increased
exponentially due to introduction of consumer finance schemes. The delivery
periods increased to as long as 2 years and the cars in market were being sold for
one hundred and fifty thousand rupees over the invoice price.
Opportunities

• Even after the recent cut in prices, fuel costs are the major part of every
consumer’s spending every month. Toyota can introduce the Hybrid technology
which is used in Prius, in Corolla as well. This will not only help reducing fuel
bills of car users but will also be environment friendly.
• As the steel prices are decreasing, Toyota can reduce the price of the new
Corolla.
• Toyota can introduce factory fitted CNG in Corolla. Factory fitted CNG is more
reliable and has better performance as compared to one installed later.

Threats

• The biggest threat to the new Corolla is the old Corolla. There is a price
difference of around 20 % in the prices of new and old corolla. So many people
are opting for old Corollas in good condition.
• The new trend of importing second hand cars from foreign is affecting the sales of
new Corolla. Because of these imported cars, new Toyota Corolla and a used
Honda Accord CL 7 are in the same price range. And many consumers opt for the
later.
• Pakistan is a huge market of second hand cars. Especially in rural areas, people
opt for second hand cars as they are cheaper. These second hand cars affect the
sales of new cars.

Competition

The major competition that Toyota Corolla faces in Pakistan is from Honda Civic and
Honda City (HONDA ATLAS CARS (PAKISTAN) LTD). Other competitors are Suzuki
Liana (PAK SUZUKI MOTOR COMPANY LTD) and Nissan Sunny (GHANDHARA
NISSAN LTD). But sales of Corolla outnumber sales of its competitors by a huge
difference. Following table shows the sales of these vehicles in the past three years:
Vehicle Sales 2006-2006 Sales 2006-2007 Sales 2007-2008
Toyota Corolla 30,527 35,762 33,640
Honda Civic 11,998 6,518 5,762
Honda City 16,136 11,848 8,439
Combined sales of 28,134 18,366 14,201
Honda(City $ Civic)
Suzuki Liana 4,571 6,067 2,983

Nissan Sunny stopped production in 2003-04 when only 25 cars were sold in the whole
year. The figures clearly show that Corolla has outsold all of its competitors in the past
three years in a row. Even the combined sales of two brands of Honda have been almost
50% lesser than sales of Toyota Corolla in years 2006-07 and 2007-08.

The Marketing Mix

Toyota Corolla has formed a near perfect market mix in Pakistan. The four P’s are
explained in detail below:

Product

Corolla is a goods and service combination that Toyota offers to the consumers. It comes
in various models like 1300 cc Xli and Gli, 1800 cc Altis and Diesel 2.0D Saloon. The
1.8 Liter VVTi Altis and 1.3 Liter VVTi Xli and Gli are suited for roads of Pakistan. The
car comes in choice of 9 metallic and matte finished colors. Various options like
Automatic/Manual transmission and sunroof are available according to choice of the
customer. Safety goes beyond the structural designs to ensure maximum passenger
protection. Included are SRS airbag, whiplash injury protection system, seat belts with
pretension force limiter, ABS with Brake assist, and LED lamps. Diesel models are also
available.
Price

Toyota Corolla has always had a lower price tag as compared to most of its competitors.
The new base model Corolla is available for Rs 1,269,000 as compared to Rs 1,525,000
Honda Civic. The price is considerably higher than Rs 1,070,000 Suzuki Liana and Rs
1,050,000 Honda City. But Corolla has always proved to be worth every rupee.

Place

Toyota's corporate philosophy revolves around customer satisfaction, which is

symbolized in the 3S Concept. Toyota is the Pioneer in the 3S System, which offers
Sales, Service and Spare Parts all from the same facility. Toyota has 30 dealers all over
Pakistan, including major cities of Islamabad, Lahore Karachi, Multan, Quetta, Peshawar
and other cities like Hyderabad, Sialkot, Dera Ismail Khan, Faisalabad, Gujranwala,
Mardan, Mirpur Azad Kashmir, Rahimyar Khan Rawalpindi, Abbotabad and Sargodha.
Indus Motor Corporation and its service Department has undertaken extensive training of
its dealer' service staff by conducting over 30 specialized course a year for service
managers/service advisors, service Engineers and Technicians. Over 200 man-days are
devoted each year to Service Training.

Promotion

Extensive promotion of Corolla is carried out through TV commercials, newspapers,

broachers, websites and banners. Dealership salespeople assist potential buyers and
persuade them that Corolla is the best car for them. Indus Motor Corporation is also
running a Toyota Club program to create community of Toyota Corolla owners.

Segmentation

Toyota Corolla uses multiple segmentation techniques to segment the Pakistan market.
Corolla segments the Pakistan market demographically according to income:

• Upper Class
• Upper Middle Class
• Lower Middle Class
• Lower Class

It also segments the market according to company loyalty. Corolla has been in Pakistan
for decades and has a huge following of Corolla fans that prefer a Toyota Corolla over
anything else.

Toyota Corolla segments the market geographically as well and along with major cities,
also concentrated on rural areas where there are no dealerships of its competitors.

Target Market

About a decade ago, the major target segments of Toyota Corolla were Upper Class and
Upper Middle Class. But with introduction of consumer finance and property boom, the
target segments changed. As the upper class moved to more distinguished vehicles like
BMW, Mercedes Benz or likes of Honda Accord and Toyota Camry, Toyota Corolla
targeted the Lower Middle Class. This is a much bigger segment as compared to Upper
class and thus the sales increased from 4,761 in 1995-96 to 35,762 in 2006-07. It targeted
the income segment which could afford a lesser priced car in the past and persuaded them
to purchase a Toyota Corolla through financing from a bank.

Positioning

Over the years Toyota Corolla has positioned itself as a multi-dimensional vehicle in the
minds of consumers. It is a work horse with durability and very easy access to spare parts
and repair. Companies which need fleets of cars like Rent a Car, Huge Corporations or
Radio Cab companies prefer Toyota Corolla over anything else. The major reason is
lower price as compared to other vehicles, low maintenance cost, durability and resale
value.

At the same time, Corolla is also positioned as a luxury sedan, a status symbol. In the
status conscious market of Pakistan, this positioning played in the favor of Toyota
Corolla as Lower Middle Class looked to purchase luxurious cars.

Buying Behavior of Customer

While making the purchase decision for a Toyota Corolla a customer undertakes
Complex Buying Behavior. Consumers are highly involved as this is an expensive
product and purchased usually after long times. A consumer gives it a lot of thought as he
wants to purchase a car which expresses his personality. There is a lot of difference
between different brands of cars and consumers usually compare the details of
performance specifications of various vehicles before making a decision. Indus Motor
Corporation tries to make this decision easies for the consumer by providing detailed
explanations on its website and trained staff is present at the dealerships to answer the
queries.

Post Purchase Behavior

Although majority of customers are satisfied with the performance of Corolla when they
purchase it, many exhibit cognitive dissonance because of quality issues. A customer does
not expect leakages and breakages in a brand new car with a price tag of over a million
rupees.

Recommendations

On basis of above mentioned data, we propose following changes to be made in Toyota

Corolla:

• Improvement in quality of parts used.

 • Better quality control to monitor manufacturing process to ensure there are no
manufacturing defects.
• Better customer service to facilitate customers.
• Reduction in prices.
• Removal of reflectors from the rear bumper.

References

• http://www.toyota.com/
• http://www.toyota-indus.com/
• http://www.pama.org.pk/
• http://www.corolland.com/
• http://www.autospies.com/