INTRODUCTION

1.1. OVERVIEW - INDIAN AUTOMOBILE INDUSTRY

Over a period of more than two decades the Indian Automobile industry has been driving its own growth through phases. The entry of Suzuki Corporation in Indian passenger car manufacturing is often pointed as the first sign of India turning to a market economy. Since then the automobile sector witnessed rapid growth year after year. By late-90's the industry reached self reliance in engine and component manufacturing from the status of large scale importer. With comparatively higher rate of economic growth rate index against that of great global powers, India has become a hub of domestic and exports business. The automobile sector has been contributing its share to the shining economic performance of India in the recent years. With the Indian middle class earning higher per capita income, more people are ready to own private vehicles including cars and two-wheelers. Product movements and manned services have boosted in the sales of medium and sized commercial vehicles for passenger and goods transport. Side by side with fresh vehicle sales growth, the automotive components sector has witnessed big growth. The domestic auto components consumption has crossed rupees 9000 crores and an export of one half size of this figure. Overview Of Automobile Industry The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to sustain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved tremendous amount of success in the recent years.

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As per Society of Indian Automobile Manufacturers (SIAM) the market share of each segment of the industry is as follows:. The market shares of the segments of the automobile industry

The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual growth of 10-15% over the last decade or so. With the incremental investment of $35-40 billion, the growth is expected to double in the next 10 years. Consistent growth and dedication have made the Indian automobile industry the secondlargest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle manufacturer in the world. The Indian automobile market is among the largest in Asia. The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors, Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been 2

dominating the vehicle industry. A few of the foreign players like Toyota Kirloskar Motor Ltd., Skoda India Private Ltd., Honda Siel Cars India Ltd. have also entered the market and have catered to the customers’ needs to a large extent.

Not only the Indian companies but also the international car manufacturing companies are focusing on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the automobile companies are coming up with financial schemes such as easy EMI repayment systems to boost sales. There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the technological advancements. Besides, there are many new projects coming up in the automobile industry leading to the growth of the sector. The Government of India has liberalized the foreign exchange and equity regulations and has also reduced the tariff on imports, contributing significantly to the growth of the sector. Having firmly established its presence in the domestic markets, the Indian automobile sector is now penetrating the international arena. Vehicle exports from India are at their highest levels. The leaders of the Indian automobile sector, such as Tata Motors, Maruti and Mahindra and Mahindra are leading the exports to Europe, Middle East and African and Asian markets. The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the motive of making India the most popular manufacturing hub for automobiles and its components in Asia. The plan focuses on the removal of all the bottlenecks that are inhibiting its growth in the domestic as well as international arena.

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Top Ten Players in Indian Automobile Sector The domestic players as well as the foreign players dominate the Indian automobile sector. The key players contributing to the growth of the sector are discussed below. Top Ten Players in Indian Automobile Sector • • • • • • • • • • Maruti Suzuki India Hero Motors Limited Hero Motors Limited Tata Group Bajaj Auto Limited Mahindra Group Ashok Leyland Yamaha Motor India Hyundai Motors India Limited Toyota Kirloskar Motor Private Limited Honda Siel Cars India Limited 4 .

Soon thereafter. Simplify the pronunciation. the company name was changed to:    Signify the separation of the founders' work life from home life. was established as an independent company in 1937. Toyota Motor Co.2. of course). and Give the company an auspicious beginning. and eight is the number of strokes it takes to write Toyota in Katakana. the division produced its first Type A Engine in 1934. Production of the Model AA passenger car started in 1936. COMPANY PROFILE The story of Toyota Motor Corporation began in September 1933 when Toyota Automatic Loom created a new division devoted to the production of automobiles under the direction of the founder's son. 5 . and electric sewing machines which are available worldwide. where eight is regarded as a lucky number. which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Kiichiro Toyota. Although the founding family name is Toyoda. Toyota is considered luckier than Toyoda in Japan. Although the Toyota Group is most well known today for its cars. it is still in the textile business and still makes automatic looms (fully computerized.1.

Because of severe shortages in Japan.During the Pacific War the company was dedicated to truck production for the Imperial Army. In April 1956 the Toyota dealer chain was established. military trucks were kept as simple as possible. In 1950 a separate sales company Toyota Motor Sales Co. the trucks had only one headlight on the center of the hood. Commercial passenger car production started in 1947 with the model SA. Replica of the Toyota Model AA. was established (which lasted until July 1982). For example. the first production model of Toyota in 1936 6 .

Poland. South Africa. Toyota New Zealand assembled vehicles until 1998.ORGANISTION STUCTURE OF THE COMPANY HEADQUARTERS: TOYOTA CITY. Australia. Brazil. Canada. the Corolla. Toyota also builds and sells cars in China in a joint venture with Tianjin Xiali. the United Kingdom. Cars from these plants are often exported to other countries. when it switched to importing cars from Japan and Australia. manufacturing or assembling vehicles for local markets. France. Indonesia. including its most popular model. 7 . and more recently India. Turkey. Argentina and Czech Republic. JAPAN ASSEMBLY PLANTS OVER THE WORLD Toyota has factories all over the world. Toyota has manufacturing or assembly plants in the United States.

Toyota Car Model: Innova Camry Avalon Matrix Corolla 8 .

Prius TRUCKS: Tacoma Tundra SPORTS UTILITY VEHICLES( SUVs): 4runner 9 .

emphasizing the importance of this best-selling car.. started manufacturing the first Toyota hybrid vehicle to be made in North America. a key vehicle in Toyota’s North American lineup. Inc. several new projects were started around the world.Land cruiser OVERVIEW In 2006. In November. these were created to spread Toyota’s manufacturing knowledge and skills throughout the world in pace with the rapid growth of Toyota’s overseas manufacturing. In manufacturing. in February. with trainees passing on what they learn to team members on their return to their plants. a new Corolla range was introduced. The centers educate trainers for local manufacturing plants in all regions. In human resources development. 10 . Established as branches of the Global Production Center in Japan. while in the United States. In May. increased its manufacturing capacity. On the product front.S. the LS. Toyota was engaged in a variety of projects designed to solidify its foundations while continuing to grow. and the new global Camry went on sale. which in October celebrated 20 years of production. Lexus launched its new flagship model. In Japan. manufacture of the Camry began in Guangzhou. the Kentucky plant. Ltd. began full-scale operations at its engine factory. In Japan. Toyota Motor Kyushu. and the European Global Production Center in the United Kingdom in March. China. the Camry Hybrid. following the establishment of the Asia Pacific Global Production Center in Thailand in August 2005. while Toyota Motor Tohoku Co. Toyota established the North American Production Center in the U. the Texas plant began producing the new Tundra truck.

11 . based on the philosophy of providing “the right car.  Foster a corporate culture that enhances individual creativity and teamwork value. in 2007 Toyota introduced a flex fuel vehicle* in the Brazilian market that will run on 100% bio-ethanol fuel. while honoring mutual trust and respect between labor and management. Toyota focused its efforts on three key areas: environment. Toyota will continue to promote efforts to develop environmentally friendly technology and vehicles. GUIDING PRINCIPLES  Honor 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. safety and energy. PERCEPTS  Be contributive to the development and welfare of the country by working together. It made a special effort in the area of the environment by expanding its lineup of hybrid vehicles.In R&D.  Work with business partners in research and creation to achieve stable. while keeping ourselves open to new partnerships. In addition. in faithfully fulfilling your duties. regardless of position.” and in accordance with the infrastructure and customer needs of each region. long-term growth and mutual benefits. in the right place. From this point on. and has worked on R&D relating to plug-in hybrid. at the right time.  Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities.  Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. as part of Toyota’s efforts to respond to the diversification of energy.  Pursue growth in harmony with the global community through innovative management.  Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities.

Be reverent. strive to create a warm. **Changed Organizational Changes Chairman Vice Chairman President TITLE Executive Vice President Executive Vice President Executive Vice President Executive Vice President Senior Managing Director Senior Managing Director Senior Managing Director Senior Managing Director Honorary Chairman Senior Advisor. Member of the Board 1) Domestic Sales Operations Group and Overseas Planning Operations Group 12 .  Be practical and avoid frivolity. Be at the vanguard of the times through endless creativity.  Be kind and generous. and show gratitude for things great and small in thought and deed MANAGERIAL INFORMATION Executives Board of Directors NAME Fujio Cho* Katsuhiro Nakagawa Katsuaki Watanabe Tokuichi Uranishi Kazuo Okamoto Takeshi Uchiyamada Akio Toyoda Takeshi Suzuki Hiroshi Takada Shinichi Sasaki Shin Kanada Shoichiro Toyoda Hiroshi Okuda** *Promoted. homelike atmosphere. inquisitiveness and pursuit of improvement.

• Tokyo Secretarial Div. After Changes • Government & Public Affairs Group • Public Affairs Administration Dept. (transfer) • Tokyo General Administration Div. including Japan. price and supply-and-demand strategies 2) Government & Public Affairs Group / General Administration & Human Resources Group The transfer of some divisions/departments of the General Administration & Human Resources Group to the Government & Public Affairs Group. and to implement the "most-suitable growth strategy from a global perspective" though product. which were divided by region. domestic and overseas. • Tokyo General Administration Div. to allow close coordination between TMC and various regions.The Domestic Sales Operations Group and the Overseas Planning Operations Group have been reorganized. have taken place as follows: Before Changes • General Administration & Human Resources Group • Public Affairs Administration Dept. (transfer) • Tokyo Secretarial Div. have been integrated. i. Sales and planning functions. (transfer) 13 . Purpose As a global business management function of Toyota's global headquarters.e.

Purpose To optimize the structural organization and distribution of human resources by consolidating the divisions and departments relevant to government & public affairs 3) Production Control & Logistics Group Before Change • Production Control & Logistics Group After Change • Strategic Production Planning Group (name changed) Purpose To create a name that reflects a strengthened stance toward planning that considers the actual situation of global production activities 4) Housing Group (Housing Company) The name of the Housing Group (Housing Company) has changed. Oceania & Middle East Operations Group • Taiwan Office (transfer) • China Office (transfer) 14 . Oceania & Middle East Operations Group. Before Change • Housing Group (Housing Company) After Change • Housing Group (name changed) Purpose To reflect the achievement of the original objective to reinforce operational structures through the introduction of the "company" system 5) Divisions/departments not belonging to a group. China Operations Group The transfer of some divisions/departments to relevant groups. Asia. Before Changes • Divisions/departments not belonging to a Group • Taiwan Office • China Office After Changes • Asia.

Our hybrid-electric car will have a gasoline engine to generate electricity or provide supplementary power to the wheels. we will introduce the world's first new-energy transport that is commercially competitive with conventional automobiles. We must be a company where people think seriously about the role and responsibility of their company in the world. Equally important. Another way to align our interests with the larger interests of the community is through technology. Photos and text on the following pages introduce some of the technologies we are developing to position Toyota as an environmental leader. the value of its potential fuel savings could prove greater than its cost premium over conventional vehicles. as well as improving vehicular safety. the number of divisions has increased from 228 to 229. GROWTH Lasting growth for Toyota will depend on aligning our interests with the larger interests of customers and the community. Our economic and industrial contribution in each region grows. for example. Survival and growth in our industry will hinge on developing technologies for reducing environmental impact of our products and operations. So.Purpose To clarify the chain of command and to optimize the structural organization and distribution of human resources As a result of the above changes. it actually could save money for car owners. It is twice as fuel-efficient as conventionally powered vehicles of comparable size and performance. as we globalize our operations. That is when we will put a hybrid-electric passenger car onto the market in Japan. 15 . By the end of 1997.

had a 15. Japan's largest automaker. We have introduced or demonstrated new power train technologies in the past year that will make Toyotas run cleaner and greener than ever..S.. retail market share than Ford Motor Co. in early November and it was less than one share point behind General Motors Corp. grabbed more U. "zero emission" vehicles that alleviate urban pollution Fuel-cell systems that could transform the automobile in the 21st century. retail market share a year earlier.S.PRIORITIES OF TOYOTA IN GROWTH STRATEGY      Fortifying our product line Asserting a competitive edge in technology Accelerating globalization Reclaiming market share in Japan Cultivating demand in new business sectors Measures for asserting a competitive edge in technology have centered on environmental themes.4 percent U. Toyota.   A direct-injection system that makes gasoline engines more efficient Hybrid-electric systems that double fuel efficiency and reduce noxious emissions Pure electric. Toyota plans to enter small car segment in India 16 .   MARKET SHARE OF TOYOTA Toyota Motor Corp. Those technologies include..

World’s second largest automaker wants to get offensive in the Indian domestic auto market. Toyota is very much interested in launching a small car here in the segment currently dominated by Maruti Suzuki and Hyundai. Tata also has a decent presence in the market with their Indica range of diesel vehicles. Toyota is at the moment carrying out a feasibility study for launching such a vehicle in the domestic market where it has models like the Innova and Camry amongst others. They have had an incredible success with their stopped Qualis model and are selling Toyota Innova in large numbers. T Ino, director (marketing), Toyota Kirloskar Motor Pvt Limited has expressed that the Indian auto market is a huge one and has the capacity to involve more players in the small car segment. Toyota has a variety of interesting models in its global lineup, which it can consider to launch in the Indian market. Some of these are Vios, Platz, and Passo. The company also expects to break even here in India this year with all the accumulated losses were expected to be wiped out during 2005. They also plan to invest around Rs 130 crores during the current year to enhance efficiency.

PRODUCTS (GLOBAL):
1. AVALON 2. CAMRY 3. CAMRY SALORA 4. COROLLA ALTIS 5. MATRIX 6. PRIUS 7. 4RUNNER 8. HIGH RUNNER 9. LAND CRUISER 10. SEQUOIA 11. SIENNA

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PRICE:As far as pricing strategy of Toyota is concerned. They are focusing on the very segment of the market not only particular segment. Basically they are focusing on official and business class people

CAR MODELS (INDIA) INNOVA

EX- SHOWROOM (MUMBAI) AMOUNT IN INR. 8,01,738

COROLLA ALTIS

11,31,900

CAMRY

22,84,800

PRADO

42,27,300

Table 1.1

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FUTURE PLANS
India's car population may be growing but the growth is mainly concentrated in the small car sector, and not without reason. With increasing interest rates making buying cars costlier and the government slapping new duties on larger vehicles in addition to the existing favorable tax regime for smaller cars, even premium players are wading into the small-car scene. Indian passenger car sales rose by 11.79 per cent between April 2007 and March 2008 to 1.2 million units. Competition in the small car segment is set to increase in 2009, with planned launches by Maruti Suzuki (A-Star and Splash), Honda (Jazz) and as yet unnamed models from Ford, GM and Volkswagen. Japanese carmaker Toyota, all set to surpass General Motors as the world's largest, is the latest entrant when it made its intentions clear on the occasion of the laying of the foundation stone for its second factory in India. The decade-old Indian joint venture of the Japanese automaker, Toyota Kirloskar, is building its second plant at Bidadi, about 40 kilometers from India's IT hub of Bangalore, with an upfront investment of Rs14,000 crore ($329 million) to manufacture a range of passenger cars and multi-utility vehicles. Toyota is the majority partner with an 89-per cent stake with Kirloskar owning the rest. Karnataka chief minister B S Yeddyurappa unveiled the foundation stone for the new plant that will have a test track and additional space for suppliers and other vendors. The ceremony was attended by Toyota senior managing director Akira Okabe, chairman Ryoichi Sasaki, vice-chairman Vikram Kirloskar and managing director Hiroshi Nakagawa.

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000 units annually and will employ about 2. However. Though the new compact car has been designed for the Indian market. The factory will be ready by mid-2010 and we are yet to finalize the launch date of the new car.'' 20 . Tata Motors and Bajaj Auto can rest easy for the time being.400 people. We plan to have petrol as well as diesel versions. the initial design features indicate that it can be exported to other markets in Asia. though it may be included in future plans. ''We are working on the new design. The arrangement of this additional amount required for the plant would be worked out later. touted to be the world's cheapest car.'' The plant which is being set up will see an initial investment of Rs1400 crore. Toyota's group company. The small car will not compete with the upcoming Nano of Tata Motors. will have an installed capacity of 100. Top officials confirmed that the company will soon be introducing its newly designed compact car in the Indian market. to be commissioned by 2010. which is expected to be spread over 130 acres of land. We have basic concept of the new car ready and very shortly we will finalize the design of the car. A new test track will be included in the second plant. The model is yet to be finalized.The modular plant. Vikram Kirloskar said as much when he commented. Daihatsu. will not be involved in designing the compact new car. But this initial investment won't include certain other costs like installing robots and other automation equipment. indications are that it maybe priced higher than its Indian competitors. Although Okabe confirmed that the new product will be the cheapest in the Toyota stable.

or does it focus on a very narrow. or are they the lowest cost producer in an industry? Competitive scope of the market .are the products differentiated in any way. Each of the three options are considered within the context of two aspects of the competitive environment: Sources of competitive advantage .GENERIC STRATEGIES Generic strategies were used initially in the early 1980s. and seem to be even more popular today. They outline the three main strategic options open to organization that wish to achieve a sustainable competitive advantage.does the company target a wide market. niche market? Figure 1.1 The generic strategies are: 21 .

generating a higher than average price. labor is recruited and trained to deliver the lowest possible costs of production. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin. There is also the chance that any differentiation could be copied by competitors. The benefits of differentiation require producers to segment markets in order to target goods and services at specific segments. Producers could price at competitive parity. exploiting the benefits of a bigger margin than competitors. These costs must be offset by the increase in revenue generated by sales. low cost does not always lead to low price. 'cost advantage' is the focus. Some organization. Differentiation 3. Therefore there is always an incentive to innovated and continuously improve. Focus. are very good not only at producing high quality autos at a low price. but have the brand and marketing skills to use a premium pricing policy. 2. Factories are built and maintained. Cost leadership 2. Focus or Niche Strategy 22 . 1. Differentiation Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. The differentiating organization will incur additional costs in creating their competitive advantage.' However. Cost Leadership The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost. such as Toyota. Costs are shaved off every element of the value chain.1. Products tend to be 'no frills. Costs must be recovered. For example. Toyota differentiates its product and service. 3.

defined segment of a market. specialist niches could disappear in the long term.T ANALYSIS Strengths New investment by Toyota in factories in the US and China saw 2005 profits rise. to become the World's second largest carmaker with 6. The company uses marketing techniques to identify and satisfy 23 . A niche strategy is often used by smaller firms.W. from the small Yaris to large trucks. highly targeted marketing and a commitment to lean manufacturing and quality. This is an example of very focused segmentation. Its strong industry position is based upon a number of factors including a diversified product range. £5. against the worldwide motor industry trend. 1. Net profits rose 0.The focus strategy is also known as a 'niche' strategy. Commentators argue that this is because the company has the right mix of products for the markets that it serves. Cost focus is unachievable with an industry depending upon economies of scale e. while sales were 7. With a differentiation focus a firm creates competitive advantage through differentiation within the niche or segment. In 2003 Toyota knocked its rivals Ford into third spot. Small.g.3% higher at 18. With a cost focus a firm aims at being the lowest cost producer in that niche or segment.4 S. a niche strategy could be more suitable. The company makes a large range of vehicles for both private customers and commercial organisations. Here an organization focuses effort and resources on a narrow. A company could use either a cost focus or a differentiation focus.8% to 1. Competitive advantage is generated specifically for the niche. The company is still behind rivals General Motors with 8.55 trillion yen.78 million units.O. Where an organization can afford neither a wide scope cost leadership nor a wide scope differentiation strategy.85bn). There are potentially problems with the niche approach.59 million units in the same period. telecommunications.17 trillion yen ($11bn. targeting and positioning in a number of countries.

The World market for cars is in a condition of over supply and so car manufacturers need to make sure that it is their models that consumers want. Total Quality Management). Its brand is a household name.customer needs. Lexus has RX 400h hybrid. WEAKNESS Being big has its own problems.g. as well as the high costs of training and retaining labour. If on the other hand the car market experiences an upturn. This is a typical problem with high volume car manufacturing. then the company may miss out on potential sales due to under capacity i. Movements in exchange rates could see the already narrow margins in the car market being reduced. Rocketing oil prices have seen sales of the new hybrid vehicles increase. Toyota markets most of its products in the US and in Japan. Therefore it is exposed to fluctuating economic and political conditions those markets. The company also maximizes profit through efficient manufacturing approaches (e. the company could see over capapacity. So if the car market experiences a down turn. Toyota has also sold on its technology to other motor manufacturers. Car plants represent a huge investment in expensive fixed costs. Both are based upon advance technologies developed by the organization. OPPURTUNITIES Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles. and Toyota has it Prius. The company needs to keep producing cars in order to retain its operational efficiency. it takes time to accommodate.e. Perhaps that is why the company is beginning to shift its attentions to the emerging Chinese market. for example Ford has bought into the technology for its new Explorer 24 .

but it proved to be spacious enough to carry four adults. Europe and Australia.W. South Korea and new plants in Eastern Europe. steel and fuel. The first vehicle was released for sale in December 1983. The company has launched its new Aygo.5 COMPETITVE S. Better 25 . Toyota is to target the 'urban youth' market. Competition is increasing almost daily. the car was criticized for its diminutive size. the M800. MUL rolled out its first car. The company is also exposed to any movement in the price of raw materials such as rubber. As with any car manufacturer.O. The majority of affected vehicles were sold in the US. 65. which is targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ culture in a very competitive segment.T ANALYSIS STRENGTH In an era when owning a car was a distant dream for a vast majority of Indians. The company labeled it a people's car.5bhp at an affordable price of Rs. with new entrants coming into the market from China. Toyota did not give details of how much the recall would cost.000. Such moves can only firm up Toyota's interest and investment in hybrid R&D. The vehicle itself is a unique convertible. Initially. with a 796cc 3cylinder engine that delivered 39. THREATS Product recalls are always a problem for vehicle manufacturers.SUV Hybrid. Toyota faces tremendous competitive rivalry in the car market. In 2005 the company had to recall 880. while the rest were sold in Japan. with models extending at their rear! The narrow segment is notorious for it narrow margins and difficulties for branding. 1.00 sports utility vehicles and pick up trucks due to faulty front suspension systems.

Also the Research and developments headquarters for engine development of Maruti Suzuki are in Japan which is a major weak point.23 mn in the first week of April 2004. another MUL product. slightly over M800's sales of 10.011 units in January.518 units in February and 15. THREAT M800 had ruled the passenger car market as the only car in the entry-level segment in the Indian automobile industry and was now facing the danger of cannibalization from one of its own family members. In April. Alto For the first few months of 2004. M800 performed well. 26 . selling 15. 0. In the coming years. But gradually Alto.350 units and in May 2004. Maruti Suzuki also needs to invest in capacity and research and development in India to stay abreast of competition.373 units. Alto reported sales of 8. is the lack of product design capability. 8. began eating into M800's share.540 in March. they should focus on acquiring product design and lean production knowhow (as the Korean firms did in the eighties and early nineties. 23. 13.000 followed by the launch of the non-AC Alto for Rs.016 units.324 and 9. its sales increased to 9. Alto took over M800's position as the largest selling car with sale of 10.301 units in January. February and March respectively.399 units.technology and an affordable price due to a higher level of indigenization helped MUL achieve a dominant position in the Indian passenger car market WEAKNESS MARUTI SUZUKI’s biggest weakness. Analysts felt that Alto had taken the top spot because of its price reduction in September 2003 by Rs.

Toyota sold 3. According to analysts. which has made Innova the most successful product. Executive Vice-President.000 units since its launch last year. replacing Sachio Yamazaki. Toyota has taken many initiatives.2 million units by 2005. Toyota's strategy to corner a significant chunk of the Indian market involves "superior product offering and dedicated technology". Effective from January 1. We will continue to meet the ever-challenging customer expectations and will come out with innovative marketing strategies." "In the last one year. the company has evolved a new strategy to capture 15 per cent market share in the Indian automotive segment. Innova has successfully become a category creator.OBJECTIVE AND METHODOLOGY 2.8 million units overseas. the Toyota Quails notched sales of 25. The Indian market is important for Toyota with potential to aid its growth strategy. manufacturing six million vehicles at 56 plants in 25 countries. Their dealers have also worked hard to provide their high levels of customer support. said.. "Competition is intense in the Indian market for domestic and foreign companies." Yoshio Ishizaka. With a change of guard at Toyota Kirloskar Motor Ltd.1 SIGNIFICANCE Toyota's believes in putting the customer first and aims to provide the best levels of customer satisfaction as its main marketing strategy. In India. Last year. Toyota Motor Corporation. Atsushi Toyoshima has been appointed Managing Director of the company. he said. In this 27 . the Indian market would touch annual sales of 1.

the Indian consumer wants to take his vehicle for long drives with friends and family." Mr. so that they can maintain a viable fit between the organizational objectives. including those owning MPVs. Second. the change of leadership in Toyota's Indian division is important. to seek attributes like greater interior space and overloading ability. the decision to introduce Innova here (India) was based on three factors. "Bangalore is an ideal location to meet all of Toyota's needs. Third. also give a proper shape to company's target profit and growth. This report helps the marketing department in taking decisions to what change in distribution channels and what should be done so that marketing problem could be sorted out and how to sell their range of product in the competitive market. including auto components. The multi utility vehicle segment has also grown at doubledigit levels. First. agility and power of a sedan. while passenger car buyers look for better styling and improved riding comfort. Toyoshima said According to the managing director of Toyota Kirloskar Motor. skills and resources and its changing market opportunities. the C.segment (between Rs 5 lakh to Rs 10 lakh) of the car market has grown by 20 per cent every year. sales schemes and what impact does it has on the dealers and consumers. Atsushi Toyoshima. Innova brings together the space and fuel economy of an MPV with the style. there is a latent desire of customers. it provides feedback to the organization about their sales. with an improving lifestyle and better roads. over the last five years. The very essence of every project related to marketing is providing a view to management for chalk out the organization.2 MANAGERIAL USEFULLNESS The marketing department can use this study to enhance their marketing strategies for better sales. Toyota Kirloskar Motor has described it as the first three-row seating passenger car in the Indian market 2.context. indicating a more important role for the company's manufacturing base in Bangalore. every market research provides useful suggestions to the 28 .

Every market research proves useful to the organization.  To know about the marketing strategies used by Toyota. These are as follows. the competition and the marketing environment.  To know where Toyota stands as far as the BCG –matrix models concerned.  To know about the marketing strategies of the competitors of Toyota. it also helps in taking the information of competitor's strategies and their impact on the buyer. it also aids the formulation of the marketing mix.organization.  To discover and translate the needs and desire of customer into products and services so as to create the demand of the product (through planning and producing planned product). marketing research helps the firm in every component of the total marketing task.  To find out the market share of Toyota. product. it helps the firm acquire a better understanding of the buyer. the study reveals the fact that may have come up during the project and these facts can either be used a opportunities in exploring and expanding the business as well as can be used as safeguard against threats by competitors to prepare an effective marketing strategy. 29 .  To serve the customer through channel of distribution. Marketing research helps the firm in every component of total marketing task.3 OBJECTIVES OF STUDY The object of report is not only to focus on competitors but also to get the competitive position in the national as well as international market through customer satisfaction. 2.  To face the keen competition. distribution and pricing needs.

5 RESEARCH METHODOLOGY This project depends upon the primary as well as secondary sources which are as follows. 4. 2.4 SCOPE OF THE STUDY These are some of the scope of the study : 1.2. 5. The result of marketing success can be interpreted to assess the rate of employee satisfaction in various departments. The present study can be extended to access the present marketing condition of Indian automobile sector. place and promotional strategy for the market. 2. The study can be used to design a proper product. From the present study we can know the market share of different products and accordingly formulated strategy to enhance it. 3. 30 . This study can be applied to find out an effective distribution channel to enhance the sale of various products of Toyota motors.retailers and distributors. price. Primary Source:  Observation  Experiment  Talking with consumers.

grouped qualitatively and quantitatively according to the situation or the type of the data which was collected.e. Because it was not possible to consider each and every person of those cities or of villages so. SECONDARY DATA is represented:  In the form of tables. systematically arranged in columns and rows.  By the way of BAR GRAPHS and SUBDIVIDED BAR GRAPHS (Graphical presentation).Secondary Source:  Balance sheet of the company  Company website SAMPLE SIZE AND AREAS COVERED A customer-based survey was conducted in which 100 people were asked to fill the questionnaire in which 50 people belong to cities of Delhi and GURGAON.  After classifying is represented in the form of tables i. 31 . STATISTICAL AND PRESENTATION TOOLS PRIMARY DATA is represented:  First classified i.e. PROBABILITY SAMPLE or RANDOM SAMPLE was taken.  Some of the data is also graphically represented in the form of PIE DIAGRAM.

Questionnaire method involves some uncertainty of response. So. the study may lack accuracy. It is possible that the information supplied by the informants may be  incorrect. it was a time consuming method in which  continuous guidance was required. was difficult to presume. Some of them are as follows: Because of illiteracy.6 LIMITATIONS OF THE STUDY Since the road to improvement is never ending. 32 .2. in some cases. Co-  operation on the part of informants. so this study also suffers from certain limitations.

they all are. Consider some of the following alternative definitions: “The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time” “The achievement of corporate goals through meeting and exceeding customer needs better than the competition” “The management process that identifies. They all try to embody the essence of marketing: • Marketing is about meeting the needs and wants of customers. • Marketing is a business-wide function – it is not something that operates alone from 33 . anticipates and supplies customer requirements efficiently and profitably” “Marketing may be defined as a set of human activities directed at facilitating and consummating exchanges” Which definition is right? In short.CONCEPTUAL DISCUSSION MARKETING What is marketing? There are many different definitions of marketing.

you may find it helpful to often refer to the following diagram which summarises the key elements of marketing and their relationships: 34 .other business activities. • Marketing is about understanding customers and finding ways to provide products or services which customers demand To help put things into context.

affection. 35 . social and technological environment. Whilst customer needs are broad. economic. All these factors have to be taken into account as a business tries to match its capabilities with the needs and wants of its target customers. Businesses do not undertake marketing activities alone. People have basic needs for food. esteem and self-development. customer wants are usually quite narrow. Success is dependent on satisfying customer needs. shelter. This important perspective is commonly known as the marketing concept. very broad. They face threats from competitors. Customer needs are. and changes in the political. The marketing concept is about matching a company's capabilities with customer wants.2 MARKETING CONCEPT AND ORIENTATION It is a fundamental idea of marketing that organisations survive and prosper through meeting the needs and wants of customers. An organisation that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. therefore. This matching process takes place in what is called the marketing environment. What are customer needs and wants? A need is a basic requirement that an individual wishes to satisfy.Figure 1. Many of these needs are created from human biology and the nature of social relationships.

Consumer wants are shaped by social and cultural forces. many consumers around the globe want a Mercedes. but they also have to make them affordable to a sufficient number to create profitable demand. eating at McDonalds satisfies the need to meet hunger. What they want to eat and in what kind of environment will vary enormously. businesses do try to influence demand by designing products and services that are • Attractive • Work well • Are affordable • Are available 36 . For example. But relatively few are able and willing to buy one. This leads onto another important concept . Consider this example: Consumers need to eat when they are hungry. Businesses therefore have not only to make products that consumers want. For some.that of customer demand: Consumer demand is a want for a specific product supported by an ability and willingness to pay for it.A want is a desire for a specific product or service to satisfy the underlying need. the media and marketing activities of businesses. However. Businesses do not create customer needs or the social status in which customer needs are influenced. It is not McDonalds that makes people hungry. Some consumers are never satisfied unless their food comes served with a bottle of fine Chardonnay. For others a microwaved readymeal meets the need.

A prominent marketer. E.Businesses also try to communicate the relevant features of their products through advertising and other marketing promotion. MARKETING MIX The marketing mix is generally accepted as the use and specification of the four Ps describing the strategic position of a product in the marketplace. which would see wide popularity. A less obvious but ubiquitous mass produced service is a computer operating system. Price – The price is the amount a customer pays for the product. This version continued in 1953 when Neil Borden. product identity 37 . material costs. the fundamentals of marketing typically identifies the four Ps of the marketing mix as referring to: Product -An object or a service that is mass produced or manufactured on a large scale with a specific volume of units. proposed a 4 P classification in 1960. DEFINITION Although some marketers[who?] have added other Ps. A typical example of a mass produced service is the hotel industry. One version of the origins of the marketing mix starts in 1948 when James Culliton said that a marketing decision should be a result of something similar to a recipe. such as personnel and packaging. took the recipe idea one step further and coined the term 'Marketing-Mix'. The four Ps concept is explained in most marketing textbooks and classes. It is determined by a number of factors including market share. Typical examples of a mass produced objects are the motor car and the disposable razor. competition. in his American Marketing Association presidential address. Jerome McCarthy.

satisfied customers or people specifically engaged to create word of mouth momentum. Place – Place represents the location where a product can be purchased.and the customer's perceived value of the product. It can include any physical store as well as virtual stores on the Internet. Promotion – Promotion represents all of the communications that a marketer may use in the marketplace. seminars or trade fairs and events. word of mouth and point of sale. Promotion has four distinct elements . as in useful items distributed to targeted audiences with no obligation attached. A certain amount of crossover occurs when promotion uses the four principal elements together.99 would be considered a tactical change. exhibitions. radio and Internet adverts through print media and billboards. This category has grown each year for the past decade while most other forms have suffered.advertising.00 to $39. a large change in the price. which is common in film promotion. One of the most notable means of promotion today is the Promotional Product. The business may increase or decrease the price of product if other stores have the same product. from television and cinema commercials. Advertising covers any communication that is paid for. It is often referred to as the distribution channel. However a change of $131 to $130. Making small changes in the marketing mix is typically considered to be a tactical change. optimizing the marketing mix is the primary responsibility of marketing. Public relations are where the communication is not directly paid for and includes press releases. 38 . Making large changes in any of the four Ps can be considered strategic. say from $19. conferences. For example. Broadly defined. It is the only form of advertising that targets all five senses and has the recipient thanking the giver. Word of mouth is any apparently informal communication about the product by ordinary individuals. By offering the product with the right combination of the four Ps marketers can improve their results and marketing effectiveness.00 would be considered a strategic change in the position of the product. public relations. sponsorship deals. potentially related to a promotional offer. Sales staff often plays an important role in word of mouth and Public Relations (see Product above).

Process. Promotion. He argues that a net present value approach maximizing shareholder value provides a "rational framework" for managing the marketing mix. Others claim it has too strong of a product market perspective and is not appropriate for the marketing of services. People. and Physical evidence 39 . Doyle claims that developing marketing based objectives while ignoring profitability has resulted in the dot-com crash and the Japanese economic collapse. Product. According to Doyle it has never been clear what criteria to use in determining an optimum marketing mix. Objectives such as providing solutions for customers at low cost have not generated adequate profit margins. Price. He also claims that pursuing a ROI approach while ignoring marketing objectives is just as problematic. Some people claim the four Ps are too strongly oriented towards consumer markets and do not offer an appropriate model for industrial product marketing.CRITICISMS Peter Doyle claims that the marketing mix approach leads to unprofitable decisions because it is not grounded in financial objectives such as increasing shareholder value. An expanded system based on Seven Ps stresses the importance of Place.

use of product differences. need. personality differences. Information about the markets can be obtained in several different varieties and formats. Examples of market information questions are: Who are the customers? Where are they located and how can they be contacted? What quantity and quality do they want? When is the best time to sell? Market segmentation Market segmentation is the division of the market or population into subgroups with similar motivations. and psychographic differences.MARKET RESEARCH Market research is for discovering what people want. the supply and the demand. Market trends 40 . MR-Anywhere is a very good platform for market research and analysis For starting up a business there are a few things that are important: Market information Market information is making known the prices of the different commodities in the market. Once that research is complete it can be used to determine how to market your specific product. It can also involve discovering how they act. or believe. Widely used bases for segmenting include geographic differences. demographic differences.

your customers. [Ilar 1998] But besides information about the target market you also need information about your competitor. during a period of time. products etc. you will have to derive the figures from the number of potential customers or customer segments. A few techniques are: Customer analysis Choice Modelling Competitor analysis Risk analysis Product research Advertising research 41 . In this case.The upward or downward movements of a market. The market size is more difficult to estimate if you are starting with something completely new.

3 INFERENCE:  24% of the respondents were owners of Toyota  76% of the respondents were owners of Honda. Maruti Suzuki.1 PERCENTAGE OF TOYOTA OWNERS OW NERS OF TOYOTA YES 24% NO 76% YES NO Figure 1.DATA ANALYSIS 4. etc 42 . Tata.

2 CUSTOMER SATISFACTION RATING CUSTOMER SATISFACTION 17% SATISFIED DISSATISFIED 83% Figure 1. 43 .4 INFERENCE:  83% of the Respondents were satisfied with their cars and the services of TOYOTA  However 17% of the Respondents were dissatisfied at the same time.4.

 19% and 24% respectively preferred for Hyundai & Honda. 44 .  38% of respondents preferred for Maruti.5 INFERENCE:  19% of the respondents would prefer to buy a Toyota car against its competitors.4.3 PREFERENCES OF BUYING A NEW CAR PREFERENCES OF BUYING A NEW CAR 40 30 20 10 0 TOYOTA HYUNDAI MARUTI HONDA Figure 1.

 Rest 25% was shared by T.V.4 WHERE DO YOU MANAGE TO FIND INFORMATION ABOUT TOYOTA INFORMATION ABOUT TOYOTA 12% 20% 55% 13% DEALERS PRINT MEDIA T.V.4. and Dealers for providing the information. INTERNET Figure 1.6 INFERENCE:  Information through Internet and Print media accounts for more than half or 75% of the information shared with the masses. 45 .

7 INFERENCE:  78% of the respondents felt that Toyota has the most fuel efficiency.  While 22% felt it isn’t the most fuel efficient.4. 46 .5 TOYOTA CARS HAS THE MOST FUEL EFFICIENCY F UE L E F F IC IE NC Y O F T O YO T A 100 80 60 40 20 0 78 22 Y ES NO Figure 1.

47 .8 INFERENCE: • • 70% of the respondents felt that the features of the Toyota are good. 10% thought it was very good and 12% felt satisfactory about the features.4. While 8% of respondents thought it was not so good.6 THE FEATURES OF TOYOTA AS COMPARED TO OTHER CARS FEATURES OF TOYOTA 12% 8% GOOD 10% VERY GOOD 70% NOT SO GOOD SATISFACTORY Figure 1.

 Then comes Handling and Fuel Efficiency.9 INFERENCE:  Toyota is best known for its design & comfort.7 THE QUALITIES THAT BEST DESCRIBES TOYOTA FEATURES THAT BEST DESCRIBES TOYOTA 40 30 20 10 0 HANDLING FUEL EFFICIENCY DESIGN COM FORT 15 18 38 29 Figure 1. 48 .4.

49 .4.10 INFERENCE: • • The interiors of Toyota are very good according to 74% of the respondents. 7% said it was satisfactory and 3% felt it was not so good.8 HOW DO YOU FIND THE INTERIORS OF TOYOTA INTERIORS OF TOYOTA 3% 16% 7% GOOD VERY GOOD NOT SO GOOD 74% SATISFACTORY Figure 1. 16% said it was very good.

 15% and 13% respectively want cheaper spare parts and more service stations. a theory which was backed by 72% of the respondents.4. 50 .9 WHAT SHOULD BE DONE TO IMPROVE TOYOTA ? WHAT SHOULD BE DONE TO IMPROVE TOYOTA 13% 15% 72% MAKE IT MORE AFFORDABLE CHEAPER SPARE PARTS MORE SERVICE STATIONS Figure 1.11 INFERENCE:  If Toyota is made more affordable then it would win more customers.

12 INFERENCE: 51 .10 WHAT SHOULD BE DONE TO MAKE TOYOTA THE BEST CAR WHAT SHOULD BE DONE TO MAKE TOYOTA THE BEST CAR 15 10 15 60 MAKE IT MORE FUTURISTIC MAKE IT MORE SPORTY GIVE IT A RETRO LOOK GIVE IT A CONCEPT CAR LOOK Figure 1.4.

11 ARE YOU HAPPY WITH THE AFTER SALES SERVICES PROVIDED BY TOYOTA HAPPY WITH AFTER SALES SERVICES PROVIDED BY TOYOTA 15% HAPPY UNHAPPY 85% Figure 1.13 INFERENCE: 52 . To make it the best car in its class it should be made more futuristic which was felt by 60% of the respondents.  15% of the respondents thought it should be made more sporty. 4.  10% wanted it to have a retro look and 15% wanted to give it a concept car look.

53 .  15% were unhappy with Toyota due to poor after sales services provided by them. Overall 85% of the respondents were happy with the after sales service provided by Toyota.

 If Toyota is made more affordable then it would win more customers. a theory which was backed by 72% of the respondents.1 FINDINGS  76% of the respondents were owners of Toyota  83% of the Respondents were satisfied with their cars and the services of TOYOTA. However 17% of the Respondents were dissatisfied at the same time  18% of the respondents would prefer to buy a Toyota car against its competitors  Information through Internet and Print media accounts for more than half or 75% of the information shared with the masses.FINDINGS AND RECOMMENDATIONS 5.15% and 13% respectively want cheaper spare parts and more service stations. Then comes Handling and Fuel Efficiency. 10% thought it was very good and 12% felt satisfactory about the features  Toyota is best known for its design & comfort.V. 54 . and Dealers for providing the information  78% of the respondents felt that Toyota has the most fuel efficiency  70% of the respondents felt that the features of the Toyota are good. While 8% of respondents thought it was not so good. Rest 25% was shared by T.

 Toyota should adopt an offensive marketing strategy for entering in the small car segment.10% wanted it to have a retro look and 15% wanted to give it a concept car look. This market is dominated by Maruti Suzuki and Hyundai in the Indian domestic auto market.  Toyota must at the moment carry out a feasibility study for launching a vehicle in the domestic market where it has models like the Innova and Camry amongst others.2 RECOMMENDATIONS  Toyota should adopt the defensive marketing strategy because as being the second largest car producer in the international market.becaue it faces the problem of over and under capacity in case of upturn and downturn of the market.  Toyota should conduct market survey in Indian market for quails in order to know the perception of Indian consumers. 5. To make it the best car in its class it should be made more futuristic which was felt by 60% of the respondents. 55 .  Toyota must plan out an ideal marketing producing capacity .15% of the respondents thought it should be made more sporty.

000-75.000 _________Above 75. DO YOU OWN A CAR? o YES NO IF YES.000 _________25. THEN WHICH ONE? (i)TOYOTA (ii) HYUNDAI (iii) MARUTI 2.000 _________50.ANNEXURE QUESTIONNAIRE FOR CONSUMER A) NAME B) ADDRESS C) CONTACT NUMBER D) INCOME GROUP _________15.000 1. HOW SATISFIED ARE YOU WITH THE SERVICES OFFERED BY TOYOTA ? (i)SATISFIED (ii) DISSATISFIED 56 . 000-50.000-25.

3. HOW DO YOU FIND THE FEATURES OF TOYOTA AS COMPARED TO OTHER CARS? (i)GOOD (iii)NOT SO GOOD (ii) VERY GOOD (iv) SATISFACTORY 57 . IF SATISFIED. WHERE DO YOU MANAGE TO FIND INFORMATION ABOUT TOYOTA ? (i)DEALERS (iii)T. IF GIVEN A CHOICE TO CHOOSE A CAR COMPANY. DO YOU THINK TOYOTA HAS THE MOST FUEL EFFICIENCY (i)YES (ii) NO 7.V. THEN ARE YOU HAPPY WITH THEIR CHARGES AND TIMELY DELIVERY THEY WERE OFFERING? (i)HAPPY (ii) UNHAPPY 4. WHICH COMPANY WOULD YOU CHOOSE? (i) TOYOTA (ii) MARUTI (iii) HYUNDAI 5. (ii) PRINT MEDIA (iv)INTERNET 6.

8. WHICH OF THESE QUALITIES DO YOU THINK BEST DESCRIBES TOYOTA ? (i)HANDLING (iii)DESIGN (ii) FUEL EFFICIENCY (iv)COMFORT 9. ACCORDING TO YOU WHAT SHOULD BE DONE TO MAKE TOYOTA THE BEST CAR? (i)MAKE IT MORE FUTURISTIC (ii)MAKE IT MORE SPORTY 58 . HOW DO YOU FIND THE INTERIORS OF TOYOTA ? (i)GOOD (iii)SATISFACTORY (ii) VERY GOOD (iv) NOT SO GOOD 10. ACCORDING TO YOU WHAT SHOULD BE DONE TO TOYOTA ? (i) MAKE IT MORE AFFORDABLE (ii) CHEAPER SPARE PARTS (iii)MORE SERVICE STATIONS IMPROVE 11.

com www.. Marketing Management: 30th Edition Chabra T.B.google. Marketing management 2006 Magazines Business standard Motoring May 2008 edition Internet: www.toyota .N. ARE YOU HAPPY WITH THE AFTER SALES SERVICES PROVIDED BY TOYOTA ? (i)YES (ii) NO (iii) HAPPY BUT IT CAN BE BETTER BIBLIOGRAPHY Books: Kotler Philips. Marketing management 2005 C. Gupta.(iii)GIVE IT A RETRO LOOK (iv)GIVE IT A CONCEPT CAR LOOK 12.com 59 .

com www.com www.com 60 .domain-b.wikipedia.yahoo.www.

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