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SITUATION ANALYSIS

HISTORY
Indus Motor Company (IMC) is a joint venture between the House of Habib, Toyota Motor Corporation Japan (TMC) and Toyota Tsusho Corporation Japan (TTC). The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993.

Toyota Motor Corporation and Toyota Tsusho Corporation have 25 percent stake in the company equity.
IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres. Heavy investment was made to build its production facilities based on state of art technologies.

PRODUCT PORTFOLIO
Toyota Corolla
Small passenger car Deals in six variants Out performed its competition and established a market leadership position in Pakistan by maintaining market share and a sales growth of 14.6 percent per year.

Daihatsu Cuore
Passenger car Economy segment of 850CC Deals in four different variants Increases its market share shows an impressive growth in a small car segments. (Currently Closed)

Hiace and Hilux


IMC Hiace and Hilux also increase its market share by increasing its sales every year.

PRODUCT PORTFOLIO
Camry
New generation Camry introduced in the beginning of 2006-07 Shows an inspiring performance Established a market leadership position

Land Cruiser/Prado
The new SUV category targeted Fleet Customers Stunning performance Established a market leadership in its category.

OPPORTUNITY AND ISSUE ANALYSIS

SWOT ANALYSIS

STRENGTHS
Toyota has become the generic name in the Pakistan market.

Toyota has a great strength for its XLI car.

Ample availability of the spare parts in the markets.

The price of spare parts is comparatively low

Toyota vehicles have got a much stronger resale value than other car in Pakistan.

WEAKNESSES
The power steering is not speed sensitive.

Air conditioning system in severe heat is in-effective.

The company having internal operating problems because of


dependency on Toyotas principles delivery of cars is done after 2 to 3 months.

OPPORTUNITIES
Toyota can do better by focusing on segments much more than presently being done.

Daihatsu Coure is a major opportunity for Toyota to excel further careful planning and the right time to launch the new car can prove to be a success. Although it is being closed.

Prius or any other Hybrid / Fuel Efficient Car

THREATS
Honda has adopted aggressive strategies for capturing the market.

A major threat is the changing political and economic scenarios of Pakistan.

Import of re-conditioned cars is also considered as a threat for the company.

The planned car manufacturing plants of Hyundai and Chevrolet can prove to be tough competition for Toyota if they are successful.

ANALYZING OPPORTUNITIES
Pakistani market has many opportunities for the Indus Motors. Toyota currently targeted upper class by producing luxury cars to serve their segmented customers Toyota cars are better than Suzuki in mind of customers, so company may easily capture a market share for this segment as well which is currently facing a monopoly of Suzuki.

OBJECTIVES
Profitability Balanced with customer
Maximum brand exposure Image enhancement Technological leadership Human resource skills

GOAL FORMULATION
STRATEGIC GOALS
To control 45 percent of market share in the next year. To increase the number of hours offered in management training courses. Efficient use of physical assets and financial resources, such as human resources. Enhancing the quality of our product and reach 3S Dealership Network. Enhancing corporate value and respect while achieving a long-term growth for the benefit of our shareholders.

OPERATIONAL GOALS
Increasing sales by 10 percent.
To increase productivity while working efficiently. To maximize customer satisfaction.

Increase quality of sales and service.

TACTICAL GOALS
To sell more than 55000 units in the next year. Make sure that employees are well trained. Each department must accomplish their assigned task in an effective manner. Every employee must follow the quality management standards.

PLANNING PROGRAM
Indus Motor Company, with support from Toyota Motor Corporation has worked closely with its 62 local vendors.

Since the successful launch of the Corolla and its everincreasing demand, company has been making continuous efforts to increase production and the current capacity enhancement program will boost. Its production capacity to 200 vehicles per day, generates production of around 50,000 vehicles per year.

In this expansion plan, company will be investing over Rs 500 million so that the total investment in the project would exceed Rs 3.2 billion. Indus has embarked on to enhance in-house manufacturing, increased localization, cost reduction and production efficiency. The capacity expansion would not only offer more vehicles to meet the growing demand of the Pakistani market, but it would also yield greater revenue to the government through taxes and duties.

PROBLEMS OR ISSUES
THE NATURE OF PROBLEMS/ISSUES
Numerous complaints reached Indus Motors of locking up
steering this resulted in the automobile having to being towed to dealer locations for repair.

The problem was caused by locking the steering wheel for


security purposes, which was stated as being the root cause of the problem.

Some Toyota models accelerators were mysteriously


getting stuck. This malfunction could possibly create many dangerous driving conditions for consumers.

THE CURRENT PRACTICES/POLICIES/PROCEDURE


Toyotas inherent ability is to adapt, improve and embrace changes even during the harshest times. They are giving training to their employees in order to perform well and meet the demands of the customers. They are also working on technological aspects as they are trying to make their cars fuel efficient. In order to keep their market leadership they are doing good manufacturing practices in order to improve their market share.

The Customer Relations team focused on putting in place


customer-friendly policies and procedures at Indus and its 3S dealerships to achieve quick turnaround on customer

inquiries and complaints to maximize Customer


Satisfaction.

UNDERSTANDING THE NEEDS


Toyota should improve the quality of their cars and as they are giving the promise of quality, durability and reliability to

its customers, some customers are disappointed as well.

They could introduce some programs which provide for

prompt maintenance of vehicles and have strong customer


appeal for speedy delivery of service of vehicles with attention to quality detail.

SALES ORGANOGRAM (structure)


Their sales team is headed by manager sales and marketing.
One deputy manager assisted by two assistant manager sales well supported by a team of five sales executives

achieves their targets prescribed by their senior management


& Indus Motors Company. There are fully computerized sales department with remote

terminals hooking up all sales areas with each other.


Their networking is managed by a receiving, new vehicle preparation & delivery.

ACTION PROGRAM
DEVELOPING STRATEGIES
Toyota aggressively marketed their cars as being fuel

efficient, environmentally friendly, and having better quality


than Pakistani automotive industry. Toyota was also able to identify new opportunities for

market development and spent time on product development


to tap into these markets. The company uses different strategies for promotion of

their products such as Advertising and Corporate


Communication. The company made special budget for ads to be broadcasted on electronic media as well as print media.

ACTION PLAN
To achieve the forecasted sales company has developed budgets to be spent on promotions. As the first quarter of fiscal year begins, the company develops its electronic and print ads and in the meantime working on Corporate Communication throughout the same quarter. Each quarter will be treated with the same actions unless and until any new potential threat from the existing competitors are not being observed.

FINANCIAL PROJECTION
BUDGET PLAN
SALES FORECAST
The sales forecast is only for the Year 2012, which is calculated by using a formula of sales forecasting method which is called nave method. Formula:
Next Years Sales = This Year's Sales * This Year's Sales / Last Year's Sales

Next Years Sales (2012) = Rs. 63,355,325,000

MARKETING BUDGET
Marketing Budget Rs in 000

2012 Advertisement and promotion Marketing research Corporate communication Others Total Marketing Expenses 40,000

25,000
15,000 10,000 90,000

MILESTONE
1989 1993 1996 2000 2003 2005 2006 2007 2008 Company Incorporated Dec 17 Corolla XE Launch May 13 Hilux Launch Jan 20 / Corolla Diesel Launch Apr 17 Daihatsu Cuore Launch Mar 25 Daihatsu Cuore (CNG) Launch Jan 29 Corolla Altis Launch / IMV (CBU) 4x4 Hilux Launch Capacity Expansion (200 units/day, 50,000 units/yr) Cogen plant start up / IMV Hilux S/C 4x2 Launch Nov New Corolla (242L) Launch Aug 19 Press Shop SVP Oct 13 300,000th Vehicle Line-off 20th year of Company Incorporation Launch of New Prado, Fortuner, Avanza, Terios Jan 400,000th Vehicle Line-off IMV 4x4 Launch Jan Corolla Ecotec Launch Jul 450,000th Vehicle Line-off Launch of Vigo Champ

2009 2010 2011

2012

CONTROLS
FEEDBACK MECHANISM
Social Media Allows Getting Near Real-Time Market Feedback On New Products Tapping Into Social Feedback to Improve Chances of Launch Success

CONTROL MECHANISM
The purpose is to explain Toyotas budgeting and
manufacturing control systems, both of which are integral to the achievement of Total Quality Control (TQC). Most Japanese companies use the terminology "Kaizen" (continuous improvement) and "Kanban" (Just-In-Time Manufacturing). Toyotas budgeting system is not purely based on target costing, but instead on cost control, target costing, and Kaizen.