This document provides an analysis of the automobile industry in Pakistan. It begins with an introduction to the history and development of the automobile industry in Pakistan. It then discusses the market structure, major assemblers, and does a PEST analysis and Porter's Five Forces analysis of the industry. Specific details on Toyota's operations, strengths, weaknesses, opportunities, and threats are analyzed through a SWOT analysis. Toyota's marketing mix of products, price, place, and promotion strategies are also outlined. The document concludes with recommendations for Toyota to continue strengthening its management platform and raising sales.

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2. Participants
• Hafiz Awais
• Rai Bilal Mushtaq
• Ali Javed
• Naveed Shoukat
• Abdul Rafah
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3. Automobile
Industry Analysis
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4. AUTOMOBILE INDUSTRY
An industry that produces automobiles and
other gasoline powered vehicles, such as
buses, trucks, and motorcycles.
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5. INTRODUCTION
• Started in Pakistan when the first automobile plant
was set up in May 1949 by General Motor & Sales
Co
• According to Ministry of Industries, Pakistan
produced its first vehicle in 1953, at the National
Motors Limited
• Manufacturers from the US collaborated with
Pakistani businessmen to set up; Ali Automobiles to
manufacture Ford Products in 1955
• The end of the seventies all automobile assembly in
Pakistan stopped, until 1983 when Pak Suzuki started
manufacturing their vehicles in Pakistan.
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6. INTRODUCTION(CONT.)
• The Industry highly regulated in early 1990’s
• Further Toyota Indus Motors was set up in 1990,
followed by Honda
• Key driving sector of the economy
• Motorcycle production hit the country's record
level of over 1.5 million units in 2010-2011.
• Car industry saw boom in 2006-2007 when sales
touched record peak of 180,834
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7. MARKET STRUCTURE
• The auto industry is considered to be an
oligopoly.
• Today there are 15 companies in production of
which 5 are automotive producers and 10 are
commercial vehicle producers.
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8. MAJOR ASSEMBLERS
• Toyota
• Indus Motors
• Pakistan Suzuki
• Honda Atlas
• Diwan Farooq Ltd
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9. Analysis Of the
Industry
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10. PEST ANALYSIS
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11. POLITICAL:
– Government imposes limit on the number of parts to be imported
– Legislations require locally made parts to be international
standards compliant
– Fluctuations of exchange rates & oil prices
– Foreign ownership regulations and technological cooperation’s
with other governments.
– Trade and tariff policy related motor vehicles
– Motor vehicle insurance policy
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PEST ANALYSIS

12. LEGAL:
– Business law protects companies from unfair competitions.
– Legislation protects the interests of society.
– Law To protect consumers from unfair business practices.
– At present vehicle imports are subject to six ‘fixed’ taxes
• Ports Authority Levy (PAL) of 5%,
• Nation Building Tax (NBT) of 3%,
• Social Responsibility Levy (SRL) of 1.5%,
• Road and Infrastructure Development Levy (RIDL) of 2.5%,
• Value Added Tax (VAT) of 20%
• Customs Import Duty (CID)
• Excise Duty.
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PEST ANALYSIS

13. ECONOMIC:
– Rise in inflation car manufacturers to increase their prices
– As parts are imported, the Exchange rate should effect
– High Rates of Oil & Gas
– Increase in income level
– Interest Rate also affects car prices
– Increase in Imports
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PEST ANALYSIS

14. SOCIAL:
– Car Culture
– Fashions and taste
– Increased desirability of Customized cars.
– Consumer Attitude
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PEST ANALYSIS

15. TECHNOLOGICAL:
– Electronically Controlled
– Gas-electric hybrid and Hydrogen-powered
fuel
– New technologies lead to growth in the
sales figure.
– Consumer satisfaction.
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PEST ANALYSIS

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Porter Five Forces

17. THREAT OF ENTRY (weak)
• Large amount of capital required
• Few legal barriers protect existing companies from new
entrants
• All automotive companies have established brand image
and reputation
• Products are mainly differentiated by design and
engineering quality
• It is very hard to achieve economies of scale for small
companies
• Governments often protect their home markets by
introducing high import taxes
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Porter Five Forces

18. BUYER POWER (Strong)
• There are many buyers
• Corporate or governments usually buy large
fleets and can bargain for lower prices
• It doesn’t cost much for buyers to switch to
another brand of vehicle or to start using
other type of transportation
• Buyers can easily choose alternative car
brand
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Porter Five Forces

19. SUPPLIER POWER (Weak)
• Large number of suppliers
• Some suppliers are large but the most of
them are pretty small
• Materials widely accessible
• Suppliers do not pose any threat of
forward integration
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Porter Five Forces

20. THREATS OF SUBSTITUTES (Weak)
• There are many alternative types of
transportation, such as bicycles, motorcycles,
trains, buses or planes
• Substitutes can rarely offer the same
convenience
• Alternative types of transportation almost
always cost less and sometimes are more
environment friendly
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Porter Five Forces

21. COMPETITIVE RIVALRY (Very Strong)
• Moderate number of competitors
• If a firm would decide to leave an industry it
would incur huge losses, so most of the time
it either bankrupts or stays in automotive
industry for the lifetime
• Industry is very large but matured
• Customers are loyal to their brands
• There is moderate threat of being acquired by
a competitor
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Porter Five Forces

22. Key Success Factors in the
Automotive Industry
• The key success f actors of any industry are indicators or
milestones that measure your business achievements and help
determine how well you are progressing towards your goals and
objectives.
Following are the KSFs f or the auto industry of Pakistan
• Positive Image
• Low Cost Provider
• Distribution Network
• Cash Flows
• Compliance
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23. Key Success Factors in the
Automotive Industry (Cont…)
• Flexibility
• Establishment of export markets
• Use of most efficient work practices
• Effective cost controls
• Access to the latest available and most efficient
technology and techniques
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24. TOYOTA
• Founded in 1937, Toyota Motor Corporation is a Japanese
company that engages in the design, manufacture,
assembly, and sale of passenger cars, minivans,
commercial vehicles, and related parts and accessories
primarily in Japan, North America, Europe, and Asia.
• Current brands include Toyota, Lexus, Daihatsu and Hino.
• Toyota Motor Corporation is the leading auto manufacturer
and the eighth largest company in the world.
• As of March 31, 2013, Toyota Motor Corporation’s annual
revenue was $213 billion and it employed 333,498 people.
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25. SWOT ANALYSIS OF
TOYOTA
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26. Strengths
• Strong market position and brand recognition
– ) Market Share
• 45.5% in Japan
• 12.2% in North America
• 13.4% market share in Asia (excluding Japan and China)
• 4.3% market share in Europe
• Strong focus on R&D
– Improved
• the functionality,
• Quality
• Safety
• environmental compatibility
• Extensive production and distribution network
– 50 manufacturing companies
– 27 countries and regions besides Japan
– produced 3,940,000 vehicles in Japan
– 3,495,000 vehicles across other manufacturing locations

27. Weaknesses
• Product recalls could affect brand image
– In 2011, Toyota recalled 111,000 models of Toyota and Lexus
brands’ vehicles due to shutdown of the hybrid system
– Toyota recalled 181,000 vehicles in Japan in relation to
abnormal noise and oil leakage
– In addition, the company was involved in government
investigations related to product recalls.
• Declining sales in key geographic segments
– North America, Asia, Europe and other geographic region, which
together accounted for 60.8% of the total revenues of the
company
• Poor allocation of resources as compared to peers
– Honda Motor's ROE was 4.8%, while Nissan Motor's ROE was
8%
– In contrast, Toyota's ROE was 2.7%

28. Opportunities
• Growing global automotive industry
– Downturn in 2008-2009
– Rebound in 2011-2012
– Global automotive manufacturing industry grew by
8.9% in 2012 to reach a value of $1,563.9 billion
• Toyota poised to benefit from growing partnership
with BMW
– Strategic collaboration on technological fields i.e
• Fuel cell system,
• Joint development of architecture
• Lightweight technologies
• Strong outlook for the global new car market

29. Threats
• Intense competition
– Intensifying in light of continuing globalization
• Appreciating Japanese Yen a major concern
– More export charges
– More transaction and transportation cost
• Natural disasters could impact production
structure
– Earthquake
– Flood

30. MARKETING MIX
Products PRICE
Place Promotion
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31. MARKETING MIX
Products
1. Cars (Corolla, vitz, camry, etc.)
2. Trucks/SUV’s (Land Cruser, prado,
Highlander, etc.)
3. Lexus cars & SUV’s (Mark x, LX,
GX)
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32. Price
1. Prices are varying in order to the vehicle
and color.
• White (pearl white) and black colored vehicles.
• And in same car model, price is varying from grade
to grade
• Brand name.
• Used technology and country of manufacturing.
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33. Place
1. Dealership
2. Placement through Banks
3. Dealers in Lahore i.e Walton Moters, ravi moters.
4. Dealers in Karachi i.e Eastern Moters, Westren Moters ,etc.
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34. Promotion
Toyota also taking advantage through advancement of technology
• Indus Motors Company has been applying promotion strategies in
many ways
• By ads
• Giant Billboards at Bypass and super highway
• Sponsors in Games
• Participation in exhibitions
• Display centers
• Display in big Public market
• Brochures, name cards, etc
• Via emails
• web banners on famous and expensive sites of internet
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35. RECOMENDATIONS
• Toyota should continue to do efforts to strengthen its
management platform and raise corporate value and
sales.
• Toyota should promote business and cost structure
reforms to realize a solid management platform so that
it can respond quickly to the changing market
circumstances.
• To support consolidated management on a global scale,
Toyota should enhance the power of the workplace and
diversity in the use of human resources.
• Toyota should maintain a streamlined structure through
the reduction of fixed costs. 35

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