S.K.PATEL INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES PRESENTATION ON APPLICATION OF ECONOMICS CONCEPTS ON TOYOTA MOTOR CORPORATION SUBMITTED TO Prof. Sonu Gupta
GROUP NO 24 SUBMITTED BYo Hiren Vaghelao Viram Bharwado Nikhil Prajapatio Hitesh Chaudhario Pankaj Kamaliya
FLOW OF THE PRESENTATIONIntroductionPrincipalsEconomic model The Circular Flow Diagram Macro and Micro AnalysisDemand and Supply Analysis Study on demand of Toyota motorElasticity and its applicationConsumer surplus and producer surplusCost structure Factor affecting price of toyota motor
PRINCIPLES•People Faces Trade off-people has to decide whether to purchase car of Toyota or othercompany. If it People purchase car of ford than the option ofpurchase Toyota car will be a trade off for customer or visa-versa. LIVA FIGO
•Rational People Think at Margin Toyota main function is to sale car to customers. Except this Toyota have its financial services and museum and etc
Established in 1937 out of Sakichi Toyoda’s weaving machine company Launched first car (SA Model) in 1947 “Toyota Production System” formed in 1950 based on Just-In-Time principle Overseas production starts in 1959 (Brazil) In 1972, cumulative production >10M units In 2002, entry in the Formula 1 circuit
Company Name Toyota Motor CorporationPresident andRepresentative Akio ToyodaDirector 1 Toyota-Cho, Toyota City, Aichi Prefecture 471-8571, Head Office Japan Phone: (0565) 28-2121 397.05 billion yen (as of MarchCapital 31, 2011)Shareholders Shareholder Composition From April 1 to March 31 of theFiscal Year following year Motor Vehicle Production andMain Business Activities SalesBusiness Sites Information on Business SitesNumber of employees 317,716 (as of March 31,(consolidated) 2011)
TOYOTA GLOBAL VISION Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way.
TOYOTA GLOBAL MISION Respect the culture and customs of every nation andcontribute to economic and social development throughcorporate activities in the communities Dedicate ourselves to providing clean and safeproducts and to enhancing the quality of life everywherethrough all our activities Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits while keeping ourselves open to new partnerships.
OBJECTIVe Fuel efficient, low-cost vehicles, reliable and of highquality. Sales and after sales service, total automobilevalue and customer satisfaction. Increase competitive strength through advanced technology Promoting a global perspective Increase competitive strength through advancedtechnology Environmental technology fuelconsumption, emission, recoverability Hybrid vehiclesand next generation fuel cells
Economies of Scope Economies of Scope•CAR MUV SUV•TRUCKS COMMERCIAL BIG TRUCKS•FINANCIAL SERVICES•Museum•SPORT CARS•FORMULA RACEING CARS
TOYOTA COMPANY IN WORLD Manufacturing companies in Japan Toyota Motor Kyushu, Inc. Toyota Motor Hokkaido, Inc. Toyota Auto Body Co., Ltd. Kanto Auto Works, Ltd. Toyota Industries Corporation Aichi Steel Corporation Toyoda Machine Works, Ltd. Toyoda Gosei Co., Ltd. Toyota Boshoku Corporation
Manufacturing companies overseas Toyota Motor Manufacturing, Kentucky, Inc. Toyota Motor Manufacturing, Indiana, Inc. Toyota Motor Manufacturing Canada Inc. Toyota Motor Manufacturing (UK) Ltd. Toyota Motor Thailand Co., Limited Toyota Motor Corporation Australia Ltd. Financial companies Toyota Finance Corporation Toyota Motor Credit Corporation etc.Through these partnerships, TOYOTA implementsdiverse collaborations that complement eachother and create synergies.
AUTO MOBILE Industry in worldThe auto mobile industry in world total selling like 2009 61,791,868 12.4% 2010 77,857,705 26.0%Total automobile industry in India is 50000 cr.The industry can be divided into the SUV and the MUV smallcars market. The SUV market at present is more than 50 lakh per annumvalued at Rs. 300 croresThe per family use car ratio is 10:1SUV and MUV together constitute approximately 78% of themarket..In 2008-09, in the branded car market, toyota held the numberone spot, with a market share or 28%, followed by GM Walls at24%, VW at 20% and OTHERE at 28%
TOYOTA WORLD’S LEADING AUTOMOBILE COMPANYNO CARS GROUP Total LCV HCV HEAVY BUS Total 77,743,862 60,343,756 13,370,432 3,510,681 518,9931 TOYOTA 8,557,351 7,267,535 1,080,357 204,282 5,1772 G.M. 8,476,192 6,266,959 2,197,629 1,175 10,4293 VOLKS 7,341,065 7,120,532 220,533 WAGEN
Auto mobile INDUSTRY IN GUJARATThe Rs 50000-Crore Indian Auto mobile markets.Out of which, Gujarat contributes 25%Stiff competitions in GujaratMajor dip in car sales during festival.Ahmadabad, the auto mobile hUB of IndiaAfter come TATA also come FORD,SUZUKI.
Elasticity of Demand The Price Elasticity of Demand % change in quantity damanded % change in prices The price elasticity of demand is the relation1. D and i s t o be El ast i c.(p>1) em between percentage2. D and i s t o be em change in quantity I nel ast i c(p<1) demanded of the goods3. D and i s t o be per f ect l y em and percentage change El ast i c in price goods (p=i nf i ni t y)4. D and i s t o be per f ect l y em I nel ast i c (p=0)
The price elasticity of supply % change in quantity supplied The pr i ce % change in prices el ast i ci t y of suppl y i s t he1. Supply is to be Elastic.(p>1) r el at i on bet w een2. Supply is to be Inelastic(p<1) per cent age3. Supply is to be perfectly Elastic (p=infinity) change i n4. Supply is to be perfectly Inelastic quant i t y (p=0) suppl i ed of t he5. Unit Elastic Supply(p=1) goods and per cent age change i n pr i ce goods
PRICE ELASTICITYyear Toyota Quantity TR %change % change in Elasticity Description LIVA in price quantity price2007 6lakhs 6 36 L 0 0 0 02008 5.5lakhs 8 44 L 8 25 3.1 Elastic2009 5lakhs 9 45 L 9 11 1.2 Elastic2010 4.80lakhs 9.5 45.6 L 4 5.25 .76 Inelastic2011 4.5lakhs 10 45 L 7 5 .70 Inelastic
CONSUMER SURPLUS When any person or organization order it in bulk quantity, they get benefits on price such like as 15% discount on price. So these consumers get benefits from company and this is consumer’s surplus EXAMLPE:- Any doctor give a order of car than any dealer give discount of 10% and extra 10,000 Rs so there will be a consumer’s surplus.
PRODUCER SURPLUS Consumers are ready to pay more price due to some of feature and On extreme product and organization sale product at higher price and consumer Will willingness to pay for PRODUCER SURPLUS buying that product Here point B will be producer surplusEXAMLPE:- TOYOTA sale CAMRY car to its consumers andthe cost of car is 20 lakhs. The consumers pay for it 24 lakhsfor purchase car than 4 lakhs is producers surplus.
Cost structureFixed CostsVariable Costs: Salary Petrol and diesel expenses, Electric expenses, Advertisement expenses, Stationary and various
Factors affecting Pricing OF TOYOTAInternal Factors: Internal Cost Structure Marketing StrategyExternal Factors: Market conditions Competitors pricing Increase in various costs Prices of various materials Duties and taxes and many factors