Project Report: Toyota Islamabad Motors

Submitted to:

Sir Mohsin Zeb

Submitted by:

Muhammad Awais 12109

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Table of Contents
Dedication ....................................................................................................................................... 4
Acknowledgement........................................................................................................................... 5
Introduction to Company ................................................................................................................ 6
History ......................................................................................................................................... 6
General History of Toyota ........................................................................................................... 6
History of Toyota in Pakistan....................................................................................................... 7
Mission and vision Of Toyota Co. .................................................................................................... 8
Company’s Mission...................................................................................................................... 9
Objectives of the Toyota Islamabad Motors ............................................................................... 9
Micro and Macro Environments.................................................................................................... 10
Macro Environment................................................................................................................... 10
Political Factors ..................................................................................................................... 10
Economic Forces .................................................................................................................... 10
Demographics Forces ............................................................................................................ 11
Cultural Factors ..................................................................................................................... 11
Technological Forces ............................................................................................................. 11
Micro Environment.................................................................................................................... 11
Customers.............................................................................................................................. 12
Suppliers ................................................................................................................................ 13
Internal Public........................................................................................................................ 14
Competitors ........................................................................................................................... 14
Intermediaries ....................................................................................................................... 15
Quality Policy ......................................................................................................................... 15
Environmental Policy ............................................................................................................. 15
Organizational Culture and Environment...................................................................................... 15
SWOT Analysis ............................................................................................................................... 16
Strength ..................................................................................................................................... 16
Weaknesses ............................................................................................................................... 16
Threats ....................................................................................................................................... 16
Opportunities ............................................................................................................................ 16
Risk Taking strategy ....................................................................................................................... 16
Recruitment Criteria ...................................................................................................................... 17
Management View ........................................................................................................................ 17

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Global perspective ..................................................................................................................... 17

The 10 Principles of Global Compact......................................................................................... 18
Business PORTFOLIO ..................................................................................................................... 18
Portfolio Analysis ....................................................................................................................... 18
Techniques or Tools for the Portfolio Analysis ...................................................................... 18
Toyota Corolla BCG Matrix ........................................................................................................ 19
The McKinsey / General Electric Matrix .................................................................................... 19

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Dedication

Praise to Allah Almighty The most merciful the most Beneficent .We dedicate this effort and
the yet to come effort to our real and spiritual parents. Their love, guidance and prayers
have always accomplished us in all our tasks. Whatever we are today is just the result of
their prayers for us, and all our achievements belong to them first.

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Acknowledgement

First and foremost thanks to Almighty Allah, who has bestowed us with wisdom, with the
capability to learn and benefit by experiences. we are highly in debt to all the people , who
have extended their support and help ,and have guided us in using all our insights in every
day during the completion of our report specially Sir Mohsin zeb ,because without his
support and through his skills and guidance this report would not have completed and
enabled us to full fill our objectives .Most importantly we would like to appreciate the group
work and co ordination by whole team members including Syed Shahrukh Shah, Qasim
Qayyum Khan, Malik Waqas Nawaz Awan Kutabshahi and Waqas Hameed.

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Introduction to Company

History

Toyota continues to have a strong commitment to metals and metal casting. It does
much process development and implementation of technology to improve cost and quality.
The company is a world leader in the area of reducing pollution from casting operations.
Toyota removes zinc from automobile body scrap prior to melting and also reduces noise in
the casting environment. The plants have outstanding lighting, and the company continues
to work to reduce gas, dust, and odor in its plants. All sand is reconditioned and recycled
into either green sand molds or shell cores.

General History of Toyota

The history of Toyota started in 1933 with the company being a division of Toyoda
Automatic Loom Works 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.[2]

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. Toyota is considered luckier
than Toyoda in Japan, where eight is regarded as a lucky number, and eight is the number of
strokes it takes to write Toyota in katakana. In Chinese, the company and its vehicles are still
referred to by the equivalent characters (simplified Chinese: traditional Chinese: pinyin with
Chinese reading.

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. For example, the trucks had only one headlight on the center of the
hood. The war ended shortly before a scheduled Allied bombing run on the Toyota factories
in Aichi.

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1947 Toyopet Model SA

1957 Toyopet Crown

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 Brazil 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 models 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. 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.

History of Toyota 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 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.

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The company was incorporated in Pakistan as a public limited company in Dec 1989 and
started commercial production in May 19 1993 .The shares of the company are quoted on
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 product line includes 6 variants of the newly introduced Toyota Corolla , Toyota Hilux,
Single Cabin , and 4 versions of Daihatsu Cuore.

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 system are
implemented.

Hierarchical view of Toyota Islamabad Office

Marketing HR & Administration

Department for Sale Department Service Department Department
Corporate & Duty
Free Vehicles

MR. RAZA A ZAIDI

MR. MAZHAR A R MR. AMAN MIRZA MRS. AALIAS MOHSIN
(General Manager)
JAFFERY (General Manager) (HR ENQUIRIES)
(General Manager)

MR. FARHAN BAIG

MR. IMTIAZ BILAL (Assistant Manager Sale)
(Sr. Corporate Executive)

MR. SALMAN ALI

(Corporate Executive)

Mr. Ali S. Habib Mr. K Hyodo Mr. Parvez Ghias

(Chairman) (Vice Chairman) (Chief Executive Officer)

Information Finance Human Resource Sales & Marketing

Technology
Mr. Muhammad Faisal Mr. Salim Azhar Mr. Raza Ansari
Mr. Adnan Qazi (Chief Financial Officer) (Director) (Director)
(Chief Information
Officer) Mr. Mustafa Hasan
Lakhani
(Company Secretary)

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Management Team at Toyota Head Office Karachi

Mission and vision Of Toyota Co.

Toyota’s 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.

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.”

Company’s Mission

“WE WORK PASSIONATELY AS A TEAM EMPLOYING LATEST TECHNOLOGY TO DELIGHT AND

SATISFY OUR CUSTOMERS WITH BEST POSSIBLE AFTER SALES SERVICES”

Objectives of the Toyota Islamabad Motors

To be the market leader and satisfy the requirements of its customer, the Toyota Islamabad
Motors has set certain objectives. These are:

 Improve Quality.
 Enhance Efficiency.
 Minimize Cost.
 Increase productivity.

Over the previous years, the Toyota Islamabad Company has put its best effort to the
customers’ needs. To improve their efficiency, the company gives importance to its Human
Resource as the company believes that satisfied and quality conscious team can be produced
quality products.

The company is using the philosophy of Kaizen for continues improvement. It has a way to
company for the management by doing these efforts towards their objectives.

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Micro and Macro Environments

Macro Environment
The larger societal forces that affect the microenvironment are demographic, economic,
natural, technological, political, and cultural forces. These factors represent constraints
within which all organizations including the automobile industry must function. The
various components of general environment are

 Political
 Economic
 Demographics
 Cultural
 Technological

Political Factors
Government at all levels is an important component of the general environment no
organization or industry is immune from the various decisions made by the government. The
Pakistan, Government’s in consistent policies, frequent change in duty tariff and smuggling
are main reasons of unstable market conduction. Like other motor companies Toyota is also
affected by the current changing policies of the government.

Previously the automobile industry had to cope with more than 77000 yellow cabs that were
imported during the yellow cabs scheme and was later turned lose to the market after a
change of government and the policy scrapped.

In 1995, all the previous taxes and duties were rolled into one import duty of 30 percent on
CKD kits as well as CBU vehicles. In 1996 the sales tax on CBU was increased cost to 18
percent. In 1997 the ministry of industries and production recommended that duty on CKD
be reduced from 40 percent to 35 percent while the car sales should be exempted from CVT
and the deletion program should be accelerated.

Just a few days back the general sales tax has been increased to 15 percent promoting
more price like. So there is going to be a Rs.20000 increase in vehicles.

Economic Forces
Government economic policies at the federal level clearly influence the ability of the
industries to survive and progress. Inflation is a major economic factor which has affected
the Pakistan. The current inflation rate is 21% to 23% annually prices in the auto market
were deregulated in 2000 and grew almost 20 percent to 30 percent per annum to allow
Toyota to bring their prices to profitable levels. After three years of “Still Market”, the
market picked up.

The recent increase of 15 percent sale tax is however, going to result in a price increase.

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Demographics Forces
Society holds a global or summary belief that an organization is proper and worthy of
support. Toyota takes pride in being the most trusted name all over Pakistan. Its vehicles are
regarded as a status symbol. It is the guiding principles of Toyota which has strongly
developed trust in the people.

Cultural Factors
Toyota respects the culture and customs of every nation and community and contributes to
the economic and social development through corporate activities in the communities.
Toyota believes in honoring the language and spirit of the law of every nation and
undertake open and fair corporate activities to be a good corporate citizen of the world.
This is the reason that Toyota is proud of the fact that Pakistani society considers Toyota
vehicles to be a symbol of reliability, comfort, luxury and a have to be trusted.

Technological Forces
Technology is of particular importance because it has been and continues to be the main
source of increases in productivity. Despite changes in the means used to motivate people
and the variety of incentives that have been offered to stimulated production, the resulting
increase has been negligible when compared to that of created by technology.

The locally produced Toyota Corolla introduced in May 1993 is now in its 11 th year. Its
excellent quality, low maintenance cost and high resale value has won it the support
and loyalty of its customers. Product diversification and a wide range of colors has
allowed customers to exercise greater options and has sustained this threat. The total
company’s product range comprises of 8 variants of Corolla and 5 variants Hi lux. As a
result of the “Safety First” commitment; for the first time in Pakistan SRS “Secondary
Restrain System” Airbags have been introduced in the GLI Automatic and GLI manual
models, side impact bars which protect vehicles for side collisions have howe ver been
routinely fitted in all Corolla variants since inception. The process of making a car
more durable includes “Pitospaate Primer”, total immersion in a catholic Electro -
deposit primer, which assures long term anti corrosion and an extra thick color coat
that is better than all others, ensuring that “New Car” look “New” for years to come.

Micro Environment
The Micro environment consists of those components of the macro environment which
are directly relevant to an individual’s organization. An organi zation’s micro
environment includes

 Customers

 Suppliers

 Internal Public

 Competitors

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 Intermediaries

The boundary between an organization’s Macro and Micro environment should not be
viewed as static. Changes in the former will inevitably redefine the latter.

The various components of micro environment for Toyota have direct influence on its
performance. Moreover components of Toyota’s micro environment are also related to
its macro environment.

Customers
Toyota aims at developing loyal customers’ relationship. For this reappoint tries its best to
understand who its buyers are and what their needs are. It tries to listen to its customers,
realizing that they may be their best collaborators. Customers’ feedback drive their product
development.

To be the market leader and satisfy the requirements of its customers, the company
has set certain objectives. These are

 Improve Quality

 Enhance Efficiency

 Minimize Cost

 Increase Productivity

Over the previous years the company has put in its best efforts to manufacture quality cars
designed for its customers. In Pakistan, more and more people want to experience the
unique pleasure of motoring. Exhaustive, in-depth research and consumer surveys
conducted over the past years revealed trends of customers and the environmental factors
relating to use.

Toyota’s Marketing Policy

Toyota’s slogan “Reliability n Motion” represents its emphasis son strong trustworthy and
life-long automobiles. It has many brand loyal customers and is considered as market leader.
In Pakistan, it has aimed at various segments with their variety of models in Toyota Corolla,
so customers in every segment can be satisfied.

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Different classes of Toyota Corolla introduced in Pakistan

Model Description Segments

SE Saloon 1600 cc Industrialists, Well established Businessman,
Professionals.
GLi 1300cc Businessman, Top Level Mgt. of multinationals,
Professionals, Government High Officials.
Xli 1300cc Middle-level Executives, Government Departments &
Organizations, Professionals, Armed Forces.
2.0D / 2.0D Saloon Professionals, Business Executives who are fuel cost
conscious.

Toyota has got an effective nationwide dealer network comprising of 25 dealers at Karachi,
Lahore, Faisalabad, Mirpur, Islamabad, Peshawar, Sialkot, DI Khan, Multan, Quetta and
Larkana. This spread of network shows not how Toyota is sincerely busy in developing a
company’s customer relationship and winning the hearts of brand loyal as well as attracting
potential customers.

Suppliers
Suppliers constitute a second component in a typical organization’s micro environment.
Toyota has to respond not only to the customers they supply, but also to the sources from
which they receive supplies. Suppliers are given importance and respect by Toyota. It
continuously aims at developing a strong relationship with its suppliers. This is done to
ensure that Toyota suppliers provide quality materials which are the most important factor
for Toyota vehicles.

Japan, is the major supplier of CBU or completely built up vehicles. Also CKD kits or
completely Knocked down Kits are supplied from Japan. CKD kits mainly comprise of
the engine of vehicles. The vehicles which are assembled in Pakistan comprise of 65%
locally manufactured parts.

Toyota Indus aims for good relations with both the local and foreign suppliers. “To
achieve maximum level of customer’s satisfaction” is Toyota’s mission. This can be
proved by the fact that dealership is authorized to these selective people who offer 3
S’s. That is sales, services, spare parts. This is done to ensure convenience for its
customers. They are offering the following services to cater to the needs of their
customers:

 One year free servicing from any Toyota service center all over Pakistan.

 Free checkup camps are set annually.

 Spare parts easily available all over Pakistan.

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 The dealership network comprises of seventeen dealerships all offering sales,

services and spares.

 The customer retention department at the dealerships is also improved and

consolidated periodically.

The company believes on the fact that favorable supplier relations lead to improve quality,
better shipping arrangements early warming of major price changes and advance
information about technological or marketplace developments. So, the aim is to develop
friendly, professional relations with suppliers in which both will profit.

Internal Public
It is the action, of employees by which a company’s objectives are accomplished. In order to
achieve its goals and objectives Toyota makes sure that highly competent and skilled people
are employed. Emphases is laid to ensure that the person being hired meet the criterion for
the respective departments.

Training is an integral part in Toyota’s various departments. Training was intensified

and various courses were conducted through the previous year. Technicians at the
dealers’ service departments underwent extensive by IMC service departments to
improve their skills. Moreover, periodic training of managers is also conducted. This
include training camps, short course conducted in various well-known universities,
training programs conducted abroad and lectures of foreign exports.

Competitors
Market competition is the cornerstone of managerial capitalism. The five forces that shape
the degree of market competition operating within an organization’s micro environment are
 Rivalry among existing organization.

 Relative power of customers.

 Relative power of suppliers.

 Threat of new entrants.

 Threat of new substitutes.

Presently Toyota is proud to have the most market share. Honda stands second
followed by Suzuki and Nissan. Since its start it was only in 95-96 that Honda managed
to sale 200 more units of vehicles than Toyota. Still, Toyota is proud to be in a strong
position. However to the spirit of competition is strong and this has lead Toyota to
continuously try to improve itself, at all levels. Continuous emphasis is laid on to
attract more customers, maintains healthy relations with its suppliers and makes
efforts to improve technology. Careful strategic planning at al levels has enabled

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Toyota to achieve the highest market share and have an edge over other automobile
companies.

Intermediaries
Banks, Leasing companies and car agents are some of the intermediaries for Toyota. These
intermediaries basically giving the boost to the sales of Toyota, by offering the cars to the
consumers, in easy installments and making the cars affordable for the customers to the
higher extent.

Quality Policy and Environment Policies of Toyota Islamabad Motors

Quality Policy

We as a team at Toyota Islamabad Motor are committed to focus all our activities leading to:

 Manufacturing high quality products.

 Customers Satisfaction.
 Service to society.
 Maintain Market Leadership.

Environmental Policy

We as team of Toyota Islamabad motors are committed to continuously improve our

environmental management system to:

 Identify and avoid those environmental aspects which have negative environmental
impacts.
 Company will all applicable legal, regulatory and other requirements.
 Assist society by making the environment friendlier.

Organizational Culture and Environment

Toyota Islamabad Motors has always been in the forefront of activities that preserve and
improve their environment. They aim for growth that is in harmony with the environment
throughout all areas of their business activities. They strive to use and promote technologies
and practices that enable the environment and economy to coexist harmoniously.

The company's commitment towards the environment is manifested both in their stated
policies and actions. The team at Islamabad Motors is committed to continuously improve
the company's environment management system to identify and avoid those activities that
have a negative environmental impact, comply with all applicable legal, regulatory and other
requirements, and assist Society by making the environment friendlier.

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SWOT Analysis

Strength

 Toyota Islamabad Motors is the authorized dealer in Islamabad.

 As far as Toyota is concerned the Toyota is dealing in diesel products which other
competitors are not offering.

 Toyota has a well known name all over the world

 Toyota Islamabad Motor has trained employees and as well as they are equipped
workshops.

Weaknesses

 Toyota Islamabad Motors should have to improve their follow up procedure

 Toyota Islamabad Motors Has a weakness of low productivity through which they
are not fulfilling the demand of the customers

 They are not compensating their employ of work force.

Threats

 Toyota Islamabad Motors has a big threat from their competitors like Honda,
Suzuki, I Pakistan because their prices are relatively low than Toyota.

 Government policies and regulations can also be a biggest threat of Toyota

Islamabad Motors.

Opportunities
 They should improve their production level so that they can meet customer
demands and attract the customers and investors to invest more in the Toyota
Islamabad Motors.

 As Toyota Islamabad Motors is launching new luxury vehicles like Camry in Pakistan
so it has an opportunity for Toyota Islamabad Motors to increase their profit ratio.

Risk Taking strategy

In the presence of extensive competitors Risk taking is necessary for Toyota to achieve its
goals and objectives .In this context they promote highly flexible approach towards
achieving high market share by launching new models keeping in mind the customer needs
and purchasing power.

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Recruitment Criteria
One of the basic advantages being enjoyed by Toyota is the hiring of fully professional
employees by educating them and commencing training for the better sales of their vehicles.

Management View
Toyota is practicing Socio-economic view and considers itself highly meditative to bring
positive changes in the society in which they are working.

Chief examples of practicing this view are:

Recently Toyota has come up with an idea of a training school where they educate their
employees and other lay men about the technical and mechanical skills .This project has a
cost of 1.5 million Dollars. And this is a great success in the locality in Karachi.

Global perspective

 ISO Certification
 Safety, Health and Environment (SHE) Steering Committee
 Five Year Objectives
 Performance of Previous Years
 Environment Initiatives
 Future Plans
 Employee Training
 Awards

Toyota Islamabad Motors Company became a member of the UN Global Compact in 2006.
IMC recently submitted its second Communication on Progress (COP) 2008. This report
illustrates the commitment, management systems, actions and performance of Toyota
Islamabad Motor Company with regard to the 10 Principles of the Global Compact. As a
signatory to the Global Compact, it becomes their responsibility to adhere to the 10
Principles in their business.

The UN Global Compact is a framework for businesses that are committed to aligning their
operations and strategies with ten universally accepted principles in the areas of human
rights, labour, the environment and anti-corruption. Launched in 2000, the UN Global
Compact is the largest corporate citizenship initiative in the world. More than 3,000
companies from 100 countries, as well as 700 Civil Society and International Labour
Organizations, are engaged in the initiative and are working to promote responsible
corporate citizenship.

The Global Compact asks companies to embrace, support and enact, within their sphere of
influence, its ten principles.

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The 10 Principles of Global Compact

Toyota Islamabad Motors follow certain rules and standards in the business for ethical and
managerial purposes as follows:

 Businesses should support and respect the protection of internationally proclaimed

human rights.
 Businesses should make sure they are not complicit in human rights abuses.
 Businesses should uphold the freedom of association and the effective recognition
of the right to collective negotiation.
 Businesses should uphold the elimination of all forms of forced and compulsory
labour.
 Businesses should uphold the effective abolition of child labour.
 Businesses should uphold the elimination of discrimination in respect of
employment and occupation.
 Businesses should support a precautionary approach to environmental challenges.
 Businesses should undertake initiatives to promote greater environmental
responsibility.
 Businesses should encourage the development and diffusion of environment
friendly technologies.
 Businesses should work against corruption in all its forms, including extortion and
bribery.

Business PORTFOLIO

“The collection of businesses and products that make up the company”.

Business portfolio of Toyota Islamabad Motors includes:

 Corolla
 Hilux
 Cuore

Portfolio Analysis

“A tool by which the management identifies and evaluates the various businesses that
makes up the company”.

Techniques or Tools for the Portfolio Analysis

The Toyota Islamabad Motor used two different techniques for the portfolio analysis:

 Boston Consulting Group Matrix (BCG Approach)

 General Electric Matrix (GE Approach)

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Toyota Corolla BCG Matrix

STAR
2.0D CASH COWS
2.0D Saloon SE Saloon
GLi

QUESTION MARK DOGS

Xli 1.3

The McKinsey / General Electric Matrix

The GE / McKinsey Matrix is more sophisticated than the BCG Matrix in three aspects:

 Market (Industry) attractiveness replaces market growth as the dimension of industry attractiveness.
Market Attractiveness includes a broader range of factors other than just the market growth rate that
can determine the attractiveness of an industry / market. Compare also: Porter's Five Competitive
Forces model
 Competitive strength replaces market share as the dimension by which the competitive position of
each SBU is assessed. Competitive strength likewise includes a broader range of factors other than
just the market share that can determine the competitive strength of a Strategic Business Unit.

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 Finally the GE / McKinsey Matrix work with a 3*3 grid, while the BCG Matrix has only 2*2. This also
allows for more sophistication.

The Toyota motors Mckinsey Matrix

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References

 www.googlle.com
 www.wikipedia.org
 Toyota’s website
 MRS. AALIAS MOHSIN

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