The document provides an overview of Toyota's marketing strategy for segmenting, targeting, and positioning its products in global, regional, and national markets based on customer needs and market conditions. Toyota aims to offer "the right car for the right place" and has various vehicle options targeted at different demographic and professional groups. The document also discusses the launch of the 11th generation Toyota Corolla in Pakistan, including details on the new model variants and their key features.

1. Acknowledgement
We wouldlike to thank All Mighty Allah (S.W.T) without whose grace we would not have been able to
live up to our responsibilities , Faith in Him (S.W.T) is ever comforting.
Secondly, we wouldlike tothank Mr.Adeel Khan OSM Toyota Motors for givingushis time and sharing
his valuable experiences with us
We would also like to thank Mr. Moin Mohiyuddin (General Manager Production) in sharing with us
valuable information, although we could not meet with him personally but his in depth knowledge in
terms of production management and logistics did serve the purpose in completing this report.
Lastly, we would like to thank our course teacher Mr. Naeem Bhojani, Who has supported us in every
way possible, his way of deliverance gratifies that he is a true “Change Agent”. Passionate in learning
and developing new ideas.

2. PresentedBy:
AvaisHasan Zaidi
SalmanHaji Lateef
Umer Siddiqui
Tariq Mehmood
Faculty
Sir NaeemBhojani

3. Interviewee Profile
Adeel KhanisanEngineerwithMastersinEnvironmental Sciences.He has7
yearsof professional experience indifferentorganizationsincludingTOYOTA
Pakistanwhere he representedthemininternationalconferences.He isa
CertifiedLeadAuditorof HSEmanagementsystemsandCertifiedTOYOTA
Global EMS Auditor.He iscurrentlyworkinginOSMdepartment

4. Introduction
IMC was incorporated in 1989 as a joint venture company between the House of Habib of Pakistan,
Toyota Motor Corporation and Toyota Tsusho Corporation of Japan. The Company manufactures and
markets Toyota and Daihatsu brand vehicles in Pakistan. The main product offerings include several
variantsof the flagship‘Corolla’inthe passenger cars category, ‘Hilux’ in the light commercial vehicles
segment and ‘Fortuner’ in Sport Utility Vehicle Segment.
The manufacturing facility and offices are located at a 105 acre site in Port Qasim, Karachi, while the
product is delivered to end customers nationwide through a strong network of 37 independent 3S
Dealerships spread across the country. In its 24 years history since inception, IMC has sold more than
500,000 vehicles and has demonstrated an impressive growth, in terms of volumetric increase from a
modest beginning of 20 vehicles per day production in 1993 to 210 units daily at present through the
developmentof humantalentembracingthe ‘ToyotaWay’ of quality and lean manufacturing. Over the
years, IMC has made large scale investments in enhancing its own capacity and in meeting customer
requirementsfornewproducts.Today,Corollaisthe largestsellingautomotivebrandmodel in Pakistan
and it also has the distinction of being #1 in Toyota’s Asian market.
The Company invests heavily in training its 2,000 plus workforce of team members and management
employees and creating a culture of high performing empowered teams working seamlessly across
processesinsearchof qualityandcontinuousimprovement.The core valuesof the Company encourage
employeestopursue highstandardsof businessethicsand safety; communicate candidly by giving bad
news first and respect for people. The bi-annual TMC morale surveys show employees giving a high
positive score to the IMC work environment and level of job satisfaction.
The Company has played a major role in the development of the entire value chain of the local auto
industry and is proud to have contributed in poverty alleviation at the grass root level by nurturing
localizationthatinturnhas directlycreatedthousandsof job opportunities and transferred technology
to 60 vendors supplying parts. IMC is also a major tax payer and significant contributor toward GOP
exchequer.

5. Mission Statement
Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies
fromthe perspectiveof energysavinganddiversifying energy sources. Environment has been first and
mostimportantissue inprioritiesof Toyotaandworkingtowardcreatingaprosperoussocietyand clean
world.
Vision Statement
“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”
Core Values
Indusmotorscore valuesreflect theirwill tocompete amongstitscompetitors on standard traits, IMC’s
core values are classified as;
 World class production quality
 Achieving the ultimate goal of complete customer satisfaction
 Being seen as the best employer
 Fostering the spirit of teamwork
 Inculcating ethical and honest practices
Guiding principles
Toyota Business is guided by seven principles
Honor the language
and spirit of the law of
every nation
Respect the culture and
customs of every
nation and contribute
to economic and social
development
Dedicate ourselves to
providing clean and
safe products
Create and develop advanced
technologies and provide
outstanding products
Foster a
corporate culture
that enhances
individual creativity
Pursue growth
in harmony with the
global community
Work with
business partners in
research and creation to
achieve stable long-term
growth

6. Strategic Objectives
Achieving Market Leadership by Delivering Value to Customers
Following“CustomerFirst”philosophyinmanufacturingand providinghighqualityvehiclesandservices
that meet the needs of Pakistani customers.This includes Enhancing the quality and reach of our 3S
Dealership Network. Employing customer insight and feedback for continuous corporate renewal,
including product development, improving service and customer care.
Bringing Toyota Quality to Pakistan
 Maximizing QRD (Quality, Reliability and Durability) by built-in engineering.
 Transferring technology and promoting indigenization at IMC and its Vendors.
 Raising the bar in all support functions to meet Toyota Global Standards.
Optimizing Cost by Kaizen
• FosteringaKaizenculture andmindsetat IMC,its Dealersand Vendors. Implementing Toyota
Production System.
 Removing waste in all areas and operating in the lowest cost quartile of the industry.
Respecting our People
• Treating employees as the most important sustainable competitive resource.
• Providing a continuous learning environment that promotes individual creativity and
teamwork.
• Supportingequal employmentopportunities, diversity and inclusion without discrimination.
• Buildingcompetitive value throughmutual trustandmutual responsibility between the Indus
Team and the Company.
Becoming a Good Corporate Citizen
• Following ethical business practices and the laws of the land.
• Enhancingcorporate value andrespectwhile achieving a stable and long term growth for the
benefit of shareholders.
Becoming a Good Corporate Citizen
• Following ethical business practices and the laws of the land.
• Engaging in philanthropic and social activities that contribute to the enrichment of the
Pakistani society,especially in areas that are strategic to both societal and business needs e.g.
road safety, technical education, environment protection, etc.

7. Organizational Chart

8. Automobile Industry InPakistan
The Automotive industryhasbeenanactive and growing field in Pakistan for a long time, however not
as much established to figure in the prominent list of the top automotive industries, having astable
annual production 100-170 thousands only. Despite significant production volumes, transfer of
technology and localization of vehicle components remains low, and only a few car models are
assembledinthe countrywhilecustomershave averysmall varietyof vehiclesto choose from. The lack
of competition in the local auto industry due to the presence of just three assemblers -and only one
small car assembler- has resulted in technological stagnation of the industry; small cars produced by
Paksuzuki, the country's largest auto assembler, in the country are globally retired models utilizing
obsolete technology and not offering any safety features. Currently some of the major world
automakers have set up assembly plants or are in joint ventures with local companies these include
Toyota, General motorsHonda, Suzuki, Nissan Motors.
The higheconomicand jobmultipliereffectof thisindustryanditsdeepforwardand backward linkages
in allied industries, make the auto industry a key player in the national economy. The report further
elaboratesthatPakistanisamongsta few countriesof the worldwhichmanufacture all kindsof vehicles
i.e. 2/3 wheelers, motorcars, LCVs, tractors, prime-movers & trucks and buses. The total country
requirements are generally met from the local production except the import of certain categories of
trucks & prime-movers. Import of used cars is allowed to the bonafide ex- patriate Pakistani’s and
travelers only under the baggage scheme. The presence of few of world acclaimed brands and
multinationals in the manufacturing of vehicles for the last 2 to 3 decades and their regular expansion
plans speak of their confidence on the market, government policies and economic potential of the
country. Pakistan auto industry turnover during the year 2005-06 crossed US $ 3.6 billion which comes
to 2.8% of GDP (2005-06), thussavingsubstantial foreignexchange on imports. The job contribution by
auto industry comes to nearly 1.392 million which includes direct jobs of nearly 192,000. The auto
industry remains second largest tax payer in terms of its contribution to customs duty, sales tax and
withholdingtax. The exportcontributionhowever,ismarginal andgrowingslowly,whichotherwise has
high potential to grow in the coming years. AIDP envisage to achieve a critical mass of production,
double the contribution of auto industry to GDP from the existing 2.8%, by the year 2011-12 with high
focuson investment,technologyupgradation,increasingitsexportstoUS$ 650 million,enhancementin
jobs alongside the development of critical components to further increase the competitiveness of
domestically produced vehicles. the group also come across financial information of the leading
manufacturerswhichformedthe basisof ouropinionthatthe benefits of reduction in sales tax and the
removing of Federal Excise Duty from the sector has not been shifted to end consumers which shows
marginal economic benefits to the manufacturer of the automobiles only. The Board of Investment,
Government of Pakistan quoted the newspaper Pakistan Observer that contrary to huge Indian

9. automobile industryinspite of offeringdiscountsandattractive sops,issufferingfrom depressed sales,
the nationwide auto sales increased by 3.4 percent in
Pakistan.The salesof locally assembled passenger cars (PC) and light commercial vehicles (LCV) in the
countryincreasedbyaround3.4% overthe previous year to 146,497 units as compared to 141,654 units
soldin2009-10. Productioninthe industryalsoincreasedto153,997 unitsforthe periodendedJune 30,
11, an increase of 11% over 138,587 units last year. Punjab government’s offer of green cabs has also
contributed in growth of sales and the next quarter is likely to be stronger even going forward. The
liberalization of used car policy saw an increase of 87% in the number of used vehicle imports to 6,793
unitsin the fiscal period. If such policy continues it will impede the growth of auto industry. The sales
and production of Indus Motor’s Toyota and Daihatsu brands for the year ended June 30, 2011 has
posted sales revenue increased to Rs 61.7 billion, up by 2.7% over Rs. 60.1 billion of last year; and the
after tax profit decreased to Rs 2.7 billion, low by 21% of Rs 3.4 billion of last year. Earnings per share
also decreased to Rs 34.90, as compared to Rs.43.81 in the previous year. The economic survey of
Pakistan 2010-11(Finance Division Government of Pakistan) in its report states that the growth in
automobile industryacrossthe worlddependsheavilyoneconomicgrowth and availability of financing
from financial institution at favorable terms. The sector recorded positive growth in cars, LCVs/Jeeps
and two/three wheelersduring July-March-2010-11 as compared to same period of the preceding year
whereas the Buses, trucks and tractors witnessed a decline in their production as compared to the
previousyear.The automotive sectorhasexplored the export market, such as 7563 motorcycles and 64
auto rickshaws were exported in the last financial year. However, 9022 motorcycles and 72 auto
rickshaws have been exported up to (July- March) 2012-13. The Car/LCV sector has also exported 359
vehicles& parts worth US $ 1.58 million in the last financial year and 397 vehicles and parts worth US $
1.66 million.Accordingtoeconomicsurveyin spite of marginal growth of 0.5% points the performance
of the automobile industryisaffectedbythe factorslike weakening of demand in the international and
domesticmarket,inflation,highinputcosts,highgovernmentsectorborrowingcrowdingoutavailability
of credit to the private sector and acute energy shortages. However, events like the unprecedented
floods and destruction in supply chain due to earthquake and tsunami in Japan, compounded with a
general slowdowninthe economicenvironment,lowerGDPgrowth,risinginterestrates, limited credit
availabilityforautofinancing,depreciation of the Pak Rupee against major currencies, unprecedented
rise in prices steel and other inputs, inflation, etc impacted the demand negatively.

10. Auto Mobile Industry and Allied Industries
The automobile industryhasalsostrengthened many associated industries and allied industries. It has
not onlyprovidedjobstoalarge numberof people buthasalsocontributedsignificantlytothe national
exchequer. The most prominent allied industries are as follows.
1-CNG (compressed natural gas stations)
2-workshops
3-tyre shops
4-Automobile parts shops
AutoSector remainsthe secondlargestpayerof indirecttaxesafter the Petroleum Sector. In Pakistan's
contextthere are 10 cars in 1,000 persons whichisone of the lowest in the emerging economies which
itself speaksof highpotential of growthinthe autosector and more so in the car production. Rising per
capita income with changing demographic distribution and an anticipated influx of 30 to 40 million
young people in the economically active workforce in the next few years provides a stimulus to the
industry to expand and grow.

11. Marketing Strategy
Toyota’s segmentation and target market is guided by its philosophy of ‘right car in the rightplace’.
Toyota has employed both demographic and psychographic form of multiple segmentations and
targeteditsmarketon that basis.Forexample,ithassegmentedall the countries across the globe as its
market.
The economy class cars are targeted to lower and middle level income people and the luxury cars are
targeted to higher middle and higher income group people. With a variety of product attributes it
targetsdifferent age groupandprofessional groupsof people.Forexample,for sportpeopleit has sport
cars. For environmentally sensitive people it has Prius – environmentally green car. Likewise, it has
offered100% bio-ethanol fuel carinBrazil,where isbio-ethanol potential.Likewise,those who are truck
loversor professional who need trucks, it offers them different variety of trucks. In fact, its marketing
strategy – segmentation, targeting, and positioning is nurtured by its variety of offers and product
attributes.
Further,ithas designeditsmarketstrategyatdifferentlevels –global level, regional level, and national
level based on the assessment of customer needs and choices. Toyota focuses its products in market
with comfort, kindness, and excitement. Toyota claims that its products harmonize ecology and
emotions.One of the keyfactors for designing segmentation and targeting, Toyota’s analysis is always
based on the condition of market, economy, purchasing.capacity, and consumers’ choices. Based on
these factors Toyota is launching its global motorization strategy with leading-edge technology.
Toyota continuestobe the brandwithstrong affinityappealing to all generations. Their history tells us
that as things change with time, so do people. With customers at the epi-centre of the Company, IMC
listens to them by adopting changes through innovation to ensure sustainability in growth. Driven by
our commitmenttomake ‘Always Better Cars’, they cherish the loyalty that customers have displayed
towards them. The trust of these customers who depend on IMC to supply nothing but the best, in
termsof service,superiorqualityandgreatervalue fuelsthe passionin themtosurpassbenchmarkstoa
single most valuable end – earning smiles from customers.
The 11th Generation Corolla Launch
The launch of 11th GenerationCorollastartingJuly2014 representsasignificant milestone for IMC. The
newmodel withitsdramatic styling, exhilarating performance, cutting-edge functionalities and iconic
interior will mark the beginning of another era in the automotive history of Toyota in Pakistan and its
many attractions and features are bound to send the customer spirits soaring.
The line up of full model range includes:
Corolla1.8L Altiscomesinfourvariantsof manual and automatictransmission withthe Grande offering
top of the line specs of Continuous Variable Transmission 7 speed sport sequential paddle shift, Wi -Fi
enabled multimedia touchscreen, rearview camera,
leather seats, reclining rear seats and lot more in many amazing colors.

12. • The corolla 1.6L Altis is designed with a view to offer value for customers who need superior
performance withenhancedfuel economyandluxury.Equippedwitha7 speedAutomaticTransmission,
it offers the performance that the Altis is known to promise.
• Corolla1.3L GLi andXli withthe same extraordinarystylingandforthe first time will be available in
both manual and automatic transmission. Standard features include manually controlled air
conditioning, new comfortable seat design with fabric upholstery, more leg and trunk room, LED type
stop lamps, in-dash audio system including MP3 and USB connectivity, etc.
Toyota SURE
The Toyota Certified Used Vehicle (TCUV) concept was introduced four years ago for customers to
provide facility of trading in their old Toyota vehicles for new ones. The TCUV network grew to 16
dealerships in 2013. In line with Toyota’s Global strategy, the TCUV business has been restructured to
increase efficiency,reliabilityandtoprovide greatervalue tothe customers. Rebrandedas Toyota SURE,
the projectisstartingwith9 pilotdealers,eventually4more dealerswill be added,bringingthe countto
13 Toyota SURE Facilities.
Apart fromfacilitatingtrade business,ToyotaSUREwill alsoprovide customersthe facilityof purchasing
a used Toyota vehicle backed with limited warranty and after sales service.
It is expected that Toyota SURE will provide added value to customers and will help in retaining and
expanding the customer base for Toyota. At the same time, it will facilitate sales of new vehicles and
create additional opportunities from the used car trade-in business.
3S DEALERSHIP NETWORK
IMC expandeddealershipnetworkwiththe launchof ToyotaHighwayMotorslocated in the outskirts of
Karachi.Openingdealershipsin peripheries of major cities and in small towns is part of our strategy to
getcloserto our valuedcustomers and provide quality service at their doorsteps. Currently they have
three dealerships under construction phase, these include one in Hyderabad and two in Karachi city.
dealership network maintains Toyota’s excellent standards of service and provides pleasurable
experience to customers. Furthermore, through a dealership uplift plan the entire network has been
considerably upgraded to enhance the customer experience and now offers sales, services and spare
parts facilities at 39 dealerships in 19 cities throughout the country.

13. Elements Of Marketing Strategy
From the perspective of marketing strategy, Toyota can be taken as a company that hassuccessfully
achieved its mission statement, successfully branded its distinctive competencies, and profoundly
achieved its organizational objectives. This success is based on its successful market strategy.
In quintessence, it can be said that Toyota is an outstanding case for learning how to build and
implement market strategy, get penetration in the market, manage product life cycle, uphold market
positioning, best use of integrated market communication (IMC), and branding its product in the
mindsetof the customer.Inshort,Toyotais a notable example that proves how important is marketing
strategy in the life of a company and managers
Customer Relations
People form a lifelong affinity with their vehicles, and IMC Customer Relations (CR) plays a vital role
to keepcustomers satisfied and delighted. aggressively driven towards implementing Toyota’s Global
Customer Relations standards in full letter and spirit at IMC and dealerships. The focal point of
Company’s CR is the ‘Voice of Customer’, which proactively records and disseminates customer
feedback throughout the organization to add value to our products, services and overall customer
experience. The keytosatisfyingcustomersistobe aware of theirlevel of satisfaction with our product
and service offerings.We validate thisthroughthe biannualCustomerSatisfactionIndexresearch aimed
at gathering data that assesses our performance in handling and serving our valued customers and
identifyingthe areasforimprovement.Additionally,the Company annually conducts a focused “Toyota
CustomerDelightWorkshop”toprovide cross-functional training to IMC frontline and Dealership staff
enabling them to practically embody and promote the ‘Customer First’ Toyota mindset. While our
customer’s first line of contact is the dealership, we are just a call away and can be reached at 0800
11123 during the office hours where our dedicated representatives are available to provide swift
response. They can also be reached at customer.relations@toyota-indus.com through Email.
Dealer Operations Guidelines
With the support of Toyota Motor Asia Pacific, we initiated a pilot project to monitor compliance
Against the newly revamped Dealer Operations Guidelines that give accreditation to dealership for
Maintaining high level of employee satisfaction, an aspect viewed as instrumental in ensuring
Customer satisfaction.It is heartening to note that Toyota Defence Motors achieved the distinction of
being the only dealer in the Asia Region to have successfully implemented the program, thereby
becoming the only compliant dealer.

14. Parts
During the year, various advertising and customer care campaigns were carried out to highlight
theimportance of genuine parts for maintaining the overall health of the car. A free air conditioner
checkup campaign provided value to all customers in wake of an increasingly hot summer. These
campaigns,carriedoutthroughprintmediaand radiospots,were well received.Alsodue tolow product
differentiation,itremainsachallenge forthe customerstodistinguishbetween genuine and fake parts.
To address this problem, IMC recently initiated an awareness campaign to educate people how to
differentiate genuine from non-genuine parts.

15. Strategy for Facing External Challenges
Two years of successive decline in the demand for automobiles, marred by a stagnant economy, used
car imports, failure of the Government to firm up the much awaited auto policy that expired in June
2012, punitive taxationmeasuresandlackof effectiveleadershipatthe EngineeringDevelopmentBoard
has severely weakened the auto value chain financially, particularly the upstream vendor industry,
Compounding uncertainty over its long term future.
Throughout FY 2013-14, the company remained in constant dialogue with the GOP to seek redress on
Several taxation matters that not only hurt the industry but also deprived the exchequer of much
needed revenue. These included inter alia the 10% FED on the only locally made SUV – the Fortuner,
review of the concessionary duties and outdated valuations applied to used imported vehicles that
createdan un-level playingfieldforlocal manufacturers,rampantmis-declarationinvalue of spare parts
imports and 2% extra sales tax on the parts purchases from suppliers. Although further action is
required, we genuinely appreciate the positive attitude demonstrated by the FBR to resolve these
difficultiesandthe newBudget announcement offering status quo provides a much needed boost and
renewed hope to the industry to stage recovery in the New Year.
Moving forward, we expect the industry to deliver robust performance during 2014-15, although the
operating environment is likely to remain challenging stemming from weaknesses in the social and
economicorder.The twomainfactors contributing to our optimistic outlook are; (a) launch of the new
11th
Generation Toyota Corolla early in the new-year and (b) Suzuki’s agreement for sale of 50,000
vehicles underthe ‘ApnaRozgar Scheme’ of the Punjab Government. It is unfortunate that commercial
vehicles like Hilux have not been considered by the Punjab Government, which can create far greater
economic activity including employment generation. We hope in future the Punjab Government will
considerotherlocal manufacturesto also share in such a scheme to boost the entire auto industry and
not be concentrated to one manufacturer.
Whereas,these developmentsandthe budgetarymeasuresaugerwell in restoring lost confidence, it is
imperative thatthe Governmentquicklyfinalizes the new auto policy paving way for the new entrants
and the existingmanufacturerstoplanandinvestinnew models and technologies for future growth of
the industryandalsoresolve the menace of power shortages, poor governance and law and order that
is adding significantly to the cost of doing business and eroding the country’s competitive advantage.
The Government’sdecisiontoprovide extraordinarytax concessiontothe HybridElectricVehicles(HEV)
as a means of promoting fuel-efficient technology has not only failed to demonstrate any significant
meritbutit has hurt the local industrywithcommercial importerstaking full advantage of substantially
lower prices of used hybrid vehicles and benefiting from the anomaly in sales tax, much to the
disadvantage of the local OEMs who introduced new hybrid vehicles with complete after sales
infrastructure support and yet failed to make any substantial inroads into this HEV market segment.
The prospect of trade with India under the Non Discriminatory Market Access presents a host of
opportunities and challenges for the industry. We look forward to an effective and balanced trade
regime and hope that the Government will safeguard the industry interests by strengthening trade
defence laws, the enforcing bodies and continuously engaging the industry whilst firming the trade

16. agreements with India and other countries. This is vitally important because Pakistan has a far more
liberal importenvironmentthanIndia,whichisheavilyprotectedbytariff andnontariff barriersthatlimit
marketaccess to imported goods and in view of the significant role played by the entire auto industry
value chain in the economic development of the country through job creation, skills development,
contribution to the exchequer and transfer of technology. It is also important to note that under the
SAFTA agreement, PakistaniscommittedtosubstantialreductionintariffsonTrade withIndia to a level
of 5 to 10%, otherthan100 line items.We believe thatthe Governmentshould review and renegotiate
this decision.
Production Strategy
Indus Motor Company Ltd (IMC) was established in Dec. 89 and the plant situated at Port Qasim rolled
off the first Toyota Corolla Car 1300CC XE in March 93. The company has joint venture with Toyota
Motor Corporation (TMC) Japan & Toyota Tsusho corporation (TTC), Japan for manufacturing of Toyota
vehicles in Pakistan and the installed capacity of Plant at Port Qasim was 10,000 vehicles/ year, single
shift.The managementcontrol iswithHouse of Habib (HOH) with 50% share, while TTC/ TMC have 25%
share and the rest is public, being a limited company.
With Single model of 1300CC Corolla XE in March 93, the company kept on growing each year in terms
of production volume, product variants, marketshare and by June 99, 100% capacity utilization was
achieved as during July 98 ~ July 99. 10,000 Units of Toyota vehicle were produced with 12 models/
Variants as mentioned below
The plant has a total land of 426,500 Sq Mwith covered area of 45,000 Sq Mwhile the factory building
alone consistsof 30, 263 Sq M mainlycomprisingof Weldshop,PaintandAssembly shop.The degree of
complexityof vehicleproduction system can be judged from the fact that there are 22 work stations in
weldshop,37 work stationsin Paintshopand32 workstationsin Assembly shop and 8 work stations at
final inspectionthroughwhicheveryvehicle hastopasspriorto reachingto CBU (Completely Built Unit)
yard.

17. VEHICLE MANUFACTURING
The process of vehicle manufacturing consists of welding of body parts to form what is called a ‘shell
body’, painting it to desired colors, assembling different functional and aesthetic parts to the painted
body to convert it into a vehicle and ensuring that its looks & performance matches customer
expectation. 1.4.1.WeldingProcess –The Shell Body There are about 300 body parts which are welded
togetherby3,000 weldspotusing150 electronicallycontrolledGuns and 60 welding jigs to form a shell
body. The shell body welding process starts by building the underbody or frame work. The body sides
and roof structure are built as major sub assemblies which are transported to shell body line by over
head conveyors. The Toyota ‘Built in Quality” is assured by welding jigs with appropriate locators for
correct part positioning. An incorrect part is not accepted by welding jigs. For controlling the process
parameters whicheffectweldstrengthnamelyelectrodepressure, current amperage and time for flow
of current, are pre-set and the fully trained team member has to only press a button, positioning the
gun at appropriate locationasperprocessinstructionsheetvisible to him all the time. The various sub-
assembliesmade are finallyputon‘Marriage Jig” forweldingtotake the shape of a shell body and after
installingdoorshood, andfendersthe shell bodyisfinallyinspectedbefore being ‘Pulled’ by paint shop
for next operation.
Painting Process – The painted Body
The conveyorizedpaintingprocessensuresthatvehiclesare prevented fromrustingbesidesgivingthese
an attractive look for customers. The rust prevention is achieved through Cationic Electro Deposition
(ED) painting prior to which, the vehicles are washed degreased and phosphate coated on automatic
line. After ED painting and baking through oven primer paint is applied, followed by baking and then
final coat or Top coat paint is applied again followed by baking. Sealer & PVC application in the paint
shopeliminatesanypossibility of water leakage in the vehicle. The built-in Quality is ensured through
monitoringof process parameters like bath/ tank temperature, viscosity, humidity voltage etc. and an
alarm getsraisedincase of any deviationforwhichapromptcountermeasure isthentaken.The painted
body is then inspected in Paint shop before being pulled by Assembly shop.
Assembly Process - The Finished Vehicle
The assemblyprocessisalsoconveyorised and gradual value addition takes place as parts are installed
progressivelyateach work station of the Assembly Shop. There are 32 work stations in Assembly shop
which is divided into 3 sections namely ‘Trim Line’, ‘Chassis Line’ and ‘Final Ó Pakistan Institute of
Quality Control –( ICQI'2000) 4 Line’. The parts which are not normally seen and hidden like silencer
pads,wiringharness,steeringmechanismparts,etcare installed on this line. The partially built vehicle
then moves to ‘Chassis Line’ where underbody installations like Brake & Fuel lines, Suspension,
Transaxle assemblyFuel TankinstallationetcalongwithEngine installationtake place.The ‘Final Line’ is
responsible forinstallingpartslike Instrument Panel,RadioCassettePlayer,Seats,Carpets,WindShield,
Tyresetc. Besidesfillingall fluidslike gasoline,brake oil, steeringoil etc. The Builtin- quality is achieved
through trained team members who follow work instruction sheets which tells them the sequence of
operations, the methods to be followed, the tools to be used and the critical check points.

18. Final Inspection – Customer Satisfaction.
Before the vehicle is delivered to Finished Vehicle Yard, the Quality Assurance department evaluates
vehicle performance on V.P. I. (Vehicle Performance Inspection Line) for confirming Toyota Quality
Standards and meeting customer expectations.
(TPS) Toyota Productionsystem
The current strategythat Toyotaadapts isa Mutual trust between employees&managementand
resultsinemployeessatisfaction.The productionfrom thesesatisfiedemployeesthroughthe two
principlesof Just-in-TimeandJIDOKA.
JUST-IN-TIME
Just-in-time productionisone of the basicpillarsof TPS and refers to manufacturing and conveyance of
only what is needed when it is needed and just the right amount neededIt eliminates the need for
maintaining large inventories (reducing financial cost& storage cost), thus enabling quick response to
changes. It also eliminates thewaste that occurs when defects go undetected in manufacturing of
largebatches. Various tools and techniques are used to put this concept in practicelike:
LeveledProduction
Distributing the production of different kind of items evenly through theday and week to
allocate workevenly, thus using the resources optimally. For example for monthly production
requirement of 600 Corolla and 233 Hilux Pickup, the daily production planned is 38 Vehicle/
Day with further breakup 27 Corollas and 11 Hilux per day.
Pull System
Creatinga physical linkbetweenproceedingprocessandfollowing process,throughatool called
‘Kanban’.A ‘Kanban’ isa communication tool giving instruction for next operation and can be a
sheet of paper, metallic plate/ wooden board etc. A painted body when pulled by AssyShop
team member has a metallic Kanban attached to it which tells the team member that this
vehicle is Corolla Gli or 2.0D.
ContinuousFlowProcessing
Making itemsliterallyone at a time wherever possible. This means arranging work inside each
processto flowsmoothlyfrom one step to the next. This calls for laying out plant and devising
logistic so that work moves smoothly and on schedule from raw material to machine shops to
Assy shop to distributors, dealer and Customer.

19. Takt Time
Establishingatime frame forlinkingthe pace of workineveryprocesstothe pace of salesinthe
market.Thisiscalculatedbydividingtheavailabletime withrequiredproductionbased on
marketpull.Incase of IMC it was 10.5 Minutesfor38 Vehicle /Day.
JIDOKA
The 2nd pillarof TPSis Jidokaandaccordingto thisprinciple the workisstopped immediatelywhenever
a problemoccurs.This stoppage could be mechanical (equipment designed to detect abnormality and
stopautomatically) oroperatorsare equippedwithmeansof stopping production flow when ever they
note anythingsuspicious.Thismechanical andhumanJidokapreventsdefective items from progressing
into subsequent stage of production and thus it prevents waste that would result from producing a
series of defective items. In case of IMC a yellow string is passing through each station of production.
Whichcan be pulledbyanyTeammember if he observesanyabnormality or defect in the process he is
doing, Which brings the production line to a stop. The line starts again after the abnormality has been
removed.
As mentionedearlier,IndusMotorCo.Ltd had plantcapacityof producing10,000 vehicles/yearinsingle
shift.Withsigningof Technical Assistance Agreement with Daihatsu Motor Co. Japan, for production of
850CC Daihatsu Cuore 3,000 Units in the first year, increase in production capacity by 30% became
inevitable.One obviousconventionalmethodwastoincrease the numberof workstationswhich would
have resultedin capital investment for providing additional equipment / tools & utilities on one hand
and consequent increase of man power on the other hand. However it was decided to increase the
capacity by improving productivity. In simple terms the requirement was to increase daily production
from 38 vehicle/ days to 50 vehicles/ day thus reducing Takt time from 10.5 minutes/ vehicle to 8.5
minutes / vehicle.
The strategy implemented by Toyota Motors Strategic Heads was to reduce man hours through the
reduction of 3 M’s, this was made possible through the implication of a Japanese technique to avoid
unevenness,waste andoverburden.The tool thatisstill being used is the yamazumi chart which is the
measurement of time taken in minutes / seconds for completing all activities.

20. Result of Reducing 3 M’s
The Net result on focusing of 3M’s at indus motors is shown below;

21. Productivity Enhancement
The strategy& techniquesadapted at Indus Motor Company were based on Toyota Production System
(TPS) andcan be appliedtootherindustries/companieshoweverItwas observed that the layout of the
productionfacilityincludingthe workstationsamountto12 % idle time whichcanbe calculated through
the cycle time of production. The theoritical efficiency of workstation as claimed was not the same in
actual. Therefore there is a need to carefully plan the layout of the facility which can increase
productionfrom26 % to 30 % throughline balancingasthe facilityisproductorientedwithanassembly
inplace.The suggestionistominimze the total activitytime keepinginmindthatitdoes not exceed the
cycle time,Predecessingactivitiesshould be followed before considering any change. The idle time of
any activity should not exceed 30 % except for the firt work operation.
The followingconsiderationwill helpinpairingupgroupof activitieswiththe same precessing activities
to achive actual efficiency , This would not only increase the production of units by 30 % but will also
save operational cost / transportation/ no. of activities.
The followinglayoutshouldbe implementedbytoyotamotorstoimprove itsproduction.
 Sequence of taskstobe performedbyeachworkstation
 Logical order
 Speedconsiderations –line balancing

22. Financial Highlights
The followingfinancial highlights presentlastthree yearsperformance indicatorsof Toyotamotors
Pakistan

23. Financial Analysis
IMC is one of the majormanufacturersof locallyproducedvehicles and enjoys the market share of 25%
as per the results stated in FY 2013-14. Considering that vehicles (CKDs and CBUs) fall under the
category of luxury products in Pakistan, the impact of external and economic factors on IMC’s
fundamentals is evident as discussed below in the brief financial analysis for the FY 2013-14 and FY
2012-13.
 During FY 2012-13, the production of units plummeted in numbers owing to subdued
demandof CKDs (Completely KnockedDown) andCBUs(Completely Built Up). The demand
deterioratedduringthe tenure due toimpact of liberalized import policies (GOP enhanced
the age limit for imported cars from 3 yrs. to 5 yrs. and reduced the custom duty on import
of Hybridvehicles).This led to an increase in demand of imported vehicles and compelled
IMC to curtail the production of locally manufactured CKDs and avoid huge inventory
buildups.
 The impact on IMC’s fundamentals was clearly visible as company’s topline reflected 17%
YoY plunge in revenues for FY 2012-13. The trickledown effect was negative and company
posted a reduction in Net Income by 21% YoY in the same period.
 RevisioninGOP’simportpolicyduringFY2013-14 allowedIMCtorevive itsfundamentalsas
companyshowedmeagerimprovement in overall numbers. The key highlight was a better
bottom line representing a 15% YoY growth in Net Income.
 However; the topline remained under pressure as company produced lesser units when
comparedto same period,lastyear. Net revenues showed a YoY decline of 11% in FY 2013-
14.
 Major setbackfor IMC was the failure to meet the customer’s increased demand driven by
strengtheningPakRupee inthe lastquarterof FY 2013-14 as the inventorybackfillcouldnot
be materialized. The assembly lines remained non-operational for 18 working days due to
re-tooling during the period along with impact of preceding curtails in production, led to
shortfall of 1,500 units of production and sales.

24.  In FY 2013-14, company posted a significant increase of 124% in Fixed Operational Assets
which includes plant, machinery and other related equipments. This will enable IMC to
enhance its production capacity and avail the benefits of increased demand for locally
manufactured vehicles going forward.
 No significant change has been observed in company’s inventory turnover and debt
collection period when FY 2013-14 compared with FY 2013-12. The ROE for the comparison
periodalsoshowedminimal changesasthe company is equity operated and does not incur
any debt servicing cost.
The overall assessment based on the IMC’s fundamentals suggest that there is a significant impact of
external and economic factors like customer demand, changes in fuel prices, fluctuation in local
currency, law & order situation of the country, government policies etc. on company’s bottom-line
fundamentals.The operational performance of the company has been salient during the period which
makescompanycapable of sustainingintighteconomicconditionsandreviveasthe opportunityknocks
the door. Therefore the company must focus on sustainability to achieve its market share in
automobiles.

25. Table of Contents
Acknowledgement..............................................................................................................................1
Interviewee Profile .............................................................................................................................3
Introduction.......................................................................................................................................4
Mission Statement..............................................................................................................................5
Vision Statement................................................................................................................................5
Core Values........................................................................................................................................5
Guiding principles...............................................................................................................................5
Strategic Objectives............................................................................................................................6
Organizational Chart...........................................................................................................................7
Automobile Industry In Pakistan..........................................................................................................8
Auto Mobile Industry andAllied Industries.........................................................................................10
Marketing Strategy...........................................................................................................................11
Elements Of Marketing Strategy........................................................................................................13
Strategyfor Facing External Challenges..............................................................................................15
Production Strategy..........................................................................................................................16
(TPS) Toyota Production system ........................................................................................................18
Productivity Enhancement................................................................................................................21
Financial Highlights...........................................................................................................................22
Financial Analysis..............................................................................................................................23

26. StrategicManagementReport On
“Toyota Indus Motors”
Submitted To:
Sir Naeem bhojani
Submitted By:
AvaisHasan Zaidi.
SalmanHaji Lateef.
Umer Siddiqui.
Tariq Mehmood.