TOYOTA IN PAKISTAN

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Indus Motor Company Ltd.
 WELCOME TO

INDUS MOTOR COMPANY Ltd.

Our Core Values

 Product Quality

 Customer Satisfaction

 Team Work

 Employee Care

 Ethical & Honest Practices

In Pakistan TOYOTA has started its manufacturing activity in 1990 with the

name of Indus Motor Company Ltd. Indus Motor Company Ltd. is a joint

venture between the “House of Habib”, “TOYOTA Motor Corporation Japan

(TMC)”, and “TOYOTA Tsusho Corporation Japan” for assembling,

progressive manufacturing and marketing of TOYOTA vehicles in Pakistan.

Indus Motor Company Ltd. is engaged in sole dealership of TOYOTA and

Daihatsu Motor Company Ltd. vehicles in Pakistan through its dealership

network.

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Indus Motor Company Ltd.
Incorporation:

The Company was incorporated in Pakistan as a public limited company in

December 1989 and started commercial production in May 1993. In

addition, since than it has become the largest manufacturer of cars in

Pakistan. The shares of company are quoted on the stock exchanges of

Pakistan. Toyota Motor Corporation and Toyota Tsusho Corporation have

25 % stake in the company equity. The majority shareholder is the House

of Habib with 50 % of the equity.

Plant:

Indus Motor Company Ltd.'s production facilities are located at Port Bin

Qasim Industrial Zone near Karachi in an area measuring over 105 acres.

It must be worth mentioning here that Indus Motor Company’s plant here

in Karachi is the only manufacturing site in the world where both Toyota

and Daihatsu brands are being manufactured.

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Indus Motor Company Ltd.
MARKET OVERVIEW
Since its start back in 1990, Indus Motor Company Ltd. has enjoyed the

status of leader because the name it is reproducing is of TOYOTA. Market

of automobile in Pakistan is well established and it clearly states the self-

actualization need of Pakistani consumers. Before Indus Motor Company

Ltd.’s launch TOYOTA has a well-built network of sales that was overtaken

by Indus Motor Company Ltd. Pakistani automobile market consist of

Manufacturer like Indus Motor Company Ltd., Honda Atlas Motors and Pak

Suzuki Motors and Importer that are wide spread in country in shape of

dealers. To lead in this environment Indus Motor Company Ltd. has

extended its product line of COROLLA to six and is operating a product

mix of three categories.

Their most target markets are upper middle class, upper class, upper

upper class, government and resellers. They are executives, managers,

businessmen, landlords, politicians, dealers, government offices and

armed forces.

They say, “We have customers who trust us for reliability, performance,

safety, status, functionality and care”. They understand the fact that it is

not possible to get all these things at the same time from some one else.

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Indus Motor Company Ltd.
 MARKET SHARE
The demand in the auto sector in Pakistan is skewed towards small cars. Due to this trend Pak
Suzuki Motors enjoys a monopoly in the small-car market.

ORGANIZATION COMPETITIORS:
 HONDA CARS
 MISTIBUSHI (HIACE AND PICK UPS)
 HUYNDAI (KIA) MOTORS
 NISSAN
 SUZUKI

PRODUCT STRATEGY

Worldwide acceptance of TOYOTA is proof of its best quality products.

Indus Motor Company Ltd. has stepped in this race in 1991 by producing
COROLLA XE. Then it has continued innovations like COROLLA GL, Gli and
2.0D. At the same time it acquired the ownership of manufacturing facility
from DAIHATSU and started the production of CUORE. The third category

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Indus Motor Company Ltd.
 of production is of carriage van that Indus Motor Company Ltd. is engaged
with by producing HILUX.

Quality:

“Our name is the assurance of quality” says Indus Motor Company Ltd.
Officials. The company pays foremost attention to the quality of its
products and to its manufacturing processes and has therefore acquired
ISO 9002 certification back in the year 1999 and the certificate has been
further renewed for three years in august 2002.

WE AS A TEAM AT INDUS MOTOR ARE COMMITTED TO

FOCUS ALL OUR ACTIVITIES LEADING TO:

 MANUFACTURING HIGH QUALITY PRODUCTS.

 CUSTOMER SATISFACTION.
 SERVICE TO SOCIETY.
 MAINTAIN MARKET LEADERSHIP.

PRICING STRATEGY

As already mentioned, target market of Indus Motor Company Ltd. is

upper middle class, upper class, upper class, government and resellers.
Pricing plays a vital role in success of any product. It should be reasonable
enough to meet the requirements of target customers and not reasonable

enough to cut the profit of manufacturers.

Strategy:

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Indus Motor Company Ltd.
Internationally TOYOTA is using a pricing strategy that is a blend of
general pricing approaches i.e. cost based, value based and competition
based pricing. But the important and main approach is cost based pricing.
Indus Motor Company Ltd. charges their customer a price that is based on
these three things;

 Manufacturing cost
 Taxes imposed by Government
 Profit

Manufacturing cost is determined by company, taxes are imposed by

Government and profit is determined by the buyer’s value (determined by
surveys). It is worth mentioning here that high taxes from government of
Pakistan also cause the price to accelerate.

While launching a new product Indus Motor Company Ltd. comes into
market with a premium strategy + penetrating price with respect to its
major competitors. There is a difference of almost 50,000 in TOYOTA
COROLLA 2.0D Saloon and HONDA CIVIC VTI ORIEL Prosmatec. This surely
gives TOYOTA a competitive edge upon its competitors of same category.
As we know that price is the most flexible P of Marketing but this is not
applicable in case of COROLLA, because Indus Motor Company Ltd. keeps
its prices same and the change in prices occurs only due to the change in
some government policy.

PLACING STRATEGY

Indus Motor Company Ltd. has the strongest network of dealership in

Pakistan. They have 25 dealers throughout Pakistan who perform all the
functions of distribution channels i.e. Information, Promotions, Contact,
Matching and Negotiations. Indus Motor Company Ltd. delivers the

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Indus Motor Company Ltd.
product to consumers using an indirect channel of distribution which is as
under:

Indus Motor Company Ltd. Dealers Customers

Almost 148,000 vehicles were serviced at dealers’ outlets and this number
increased to 185,000 in coming years. Through their strong dealer’s
network, they made the availability of genuine spare parts possible all
over the country at a controlled price.

Following is the distribution of dealers all over the country:

Area Number of Dealers

Sindh 7
Punjab 11
N.W.F.P 3
Balochistan 1
Islamabad (Capital) 2
Azad Kashmir 1

PROMOTION STRATEGY

Name of TOYOTA is as much established that it does not require much

effort in promotions. But Indus Motor Company Ltd. has tried to develop

its promotional plan for COROLLA.

Advertising:

Indus Motor Company Ltd. used Print Media as well as Electronic media for
the promotion of COROLLA. Purpose of these ads is just to give the viewer
an idea that TOYOTA has produced something new and to establish
curiosity in viewer’s mind. Indus Motor Company Ltd.‘s annual report
states that it has increased the budget for advertising by almost 30% to

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Indus Motor Company Ltd.
meet the requirement of launching a new product. Advertising and sale
promotion’s budget figure has been increased from 38 million to 48

million.

Sales Promotion:

Normally no sales promotions are done by Indus Motor Company Ltd. because TOYOTA has
established a widespread community of its customers who are loyal to it. At the time of
purchase, customer is given a survey form that is to be filled by customer and sent directly to
Indus Motor Company Ltd. By doing this customer are entitled an entry in the draw of free
services worth Rs. 5000.

Launch:

Indus Motor Company Ltd. and its dealers took some exclusive steps
before launching New COROLLA. A 15 day festival at their outlets will be
arranged for the promotion. They collected data of all the customers
during past 7 years and issued invitations to them. During these 15 days
every dealer in Pakistan will provide test drive to the visitors.

SWOT ANALYSIS

Strengths:

 Largest dealer’s network in Pakistan.

 They are introducing a car with highest safety features such as E-
type air bag, side impact beams etc.
 Highly Aerodynamic body shape that helps to reduce air frictions
resulting in smooth running.
 They offer 1 year/20000 mile warranty to all customers and replace
any part containing manufacturing fault.

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Indus Motor Company Ltd.
  The highest resale value in Pakistan’s Automobile market.

Weaknesses:

 Company requires full Payment at the time of Booking.

 After introducing, it still requires 6 months to reach the unit to
customers.
 Delivery Charges are to be paid by the customers that increase the
ultimate cost.
 Change in Price will be applicable to the Vehicle, reserved already.

Opportunities and Threats:

 Pakistan’s economy is not stable and this has damaged almost

every industry in the country. Automobile industry is also included
by fluctuation of price, tax policy etc.
 Now-a-days availability of imported vehicles is getting easier and
easier that is a threat to Pakistani vehicle manufacturer and
assemblers.
 Last year Government has decreased Taxes on imported vehicles.
This was implemented to control the price of local automobiles thus
an ultimate attempt to reduce the profit margins.
 Incorporation of “Made in Pakistan” Automobiles like Dewan Farooq
Motors is affecting the local market and reducing the market share
of major companies.
 Many financial intermediaries in the countries are offering leasing
facilities to public that has Increase the popularity of luxury cars.
This is an opportunity from which Indus Motor Company Ltd. can
benefit.
 Company has the following major competitors such as Honda Atlas,
Pak Suzuki, Mitsubishi Motors and Nissan Motors.

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Indus Motor Company Ltd.
Conclusions:

Indus Motor Company Ltd. is one of the largest automobile manufacturing

companies in Pakistan. It is enjoying the status of leading company since
its incorporation.

They possess 40% market shares in Pakistan and are providing high
quality products to their customers. They have the largest dealers’
network in its class having 25 outlets throughout Pakistan. They are the
pioneer of 3-S concept in Pakistan. All the dealers in Pakistan are
providing sales, services& spare parts to their valuable customers.

Indus Motor Company Ltd. has an effective control over market and they
have formulated their regional offices in all the major cities of Pakistan by
which they are monitoring the activities of their dealers. The company is
quite sensitive towards customers’ satisfaction and they are doing this by
providing high quality products and offering after sale services.

The New COROLLA has certain exclusive feature like e-type air bag, fuel
cut system, tilt steering etc. that has positioned it at the top in its class.
The people are quite excited to own this new corolla and to drive it.

Apart from all these positive things there are certain things which are
effecting its goodwill in the market, these includes the full payment of
cost at the booking time whereas the major competitors of Toyota

like Honda Atlas, they are booking orders only for Rs.100,000. Another
important factor is that the delivery time of Toyota is approximately 6
months after launching whereas Honda Atlas is delivering its cars in only
45 days. Although Toyota has a widespread dealer’s network but all the
delivery charges are born by customer that increases the cost for them. If
a customer is in Islamabad, he has to pay approximately Rs. 8000/- more
as delivery charges. There is another thing worth mentioning that if within

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Indus Motor Company Ltd.
the delivery period, the price changes; it is applicable to all undelivered
vehicles, which creates uncertainty in consumer’s mind regarding final
prices of the car.

Recommendations:

Following are the some recommendations for Indus Motor Company Ltd.
that may help to enhance their goodwill and their market share.

1- They have to reduce the amount of advance that is required at the

time of booking.
2- Secondly the time span of delivery should be minimized after
launching to avoid the possibility of distortion in customer’s mind.
3- Customer wants a less costly family car with the name of Toyota.
4- They should focus on proper coverage of all their products on all
Medias of advertising.

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Indus Motor Company Ltd.
Notes and Acknowledgements:
1. www.TOYOTA-indus.com

2. www.TOYOTA.com

3. www.TOYOTA.com.au

4. www.TOYOTA.com.jp

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Indus Motor Company Ltd.