"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 fourspeed 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 Toyota Corolla Honda Civic Honda City Combined sales of Honda(City $ Civic) Suzuki Liana

Sales 2006-2006 30,527 11,998 16,136 28,134 4,571

Sales 2006-2007 35,762 6,518 11,848 18,366 6,067

Sales 2007-2008 33,640 5,762 8,439 14,201 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/

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