Report

Table of ContentsIntroduction.................................................................................................................................................3

Toyota Motor Corporation......................................................................................................................3

Designing the Logo..................................................................................................................................4

Start of Commercial Production 1947.....................................................................................................4

Toyota the World Leader.............................................................................................................................5

JIT – Just In Time......................................................................................................................................5

Lean Production.......................................................................................................................................5

Toyota's Global Marketing Strategies..........................................................................................................6

New Marketing Strategy..........................................................................................................................6

TOYOTA’s Non Automotive Activities:.........................................................................................................7

Aerospace................................................................................................................................................7

Philanthropy............................................................................................................................................7

Higher education.....................................................................................................................................7

Robotics...................................................................................................................................................7

Finance....................................................................................................................................................7

Agricultural biotechnology......................................................................................................................7

Automobile Sector in Pakistan.....................................................................................................................8

TOYOTA INDUS MOTOR COMPANY LTD......................................................................................................8

Vision and Mission:..................................................................................................................................9

Toyota as a Brand......................................................................................................................................10

Toyota Brand Positioning:......................................................................................................................10

Toyota Brand Image:.............................................................................................................................10

Toyota Brand success............................................................................................................................10

• Successful brand........................................................................................................................10

• Innovation..................................................................................................................................10

• Product Development................................................................................................................11

• Market Focused Strategy...........................................................................................................11

• Iconic Brands.............................................................................................................................11

• Brand Extensions.......................................................................................................................11

Toyota Indus Product Portfolio..................................................................................................................11

Locally assembled..................................................................................................................................11

Imported Vehicles.................................................................................................................................11

BRAND ARCHITECTURE:.............................................................................................................................13

TOYOTA COROLLA..............................................................................................................................13

TOYOTA CAMRY.................................................................................................................................13

DAIHATSU COURE..............................................................................................................................13

BRAND POSITIONING AND IMAGE.............................................................................................................14

TOYOTA COROLLA:................................................................................................................................14

BRAND PERSONALITY:.......................................................................................................................14

BRAND POSITIONING:........................................................................................................................14

BRAND IMAGE:..................................................................................................................................14

TOYOTA CAMRY.....................................................................................................................................14



BRAND IMAGE:..................................................................................................................................15

DAIHATSU COURE..................................................................................................................................15



BRAND IMAGE:..................................................................................................................................16

External and Internal Forces on TOYOTA INDUS:......................................................................................16

Problems highlighted.............................................................................................................................16

Threats to TOYOTA................................................................................................................................17

Economic Threats:.............................................................................................................................17

Recent 2007–2010 financial crisis..........................................................................................................17

Recommendation:.....................................................................................................................................19

IntroductionToyota, which means an industrial city of Japan in southern Honshu, is a very renowned brand name. It would be very hard to imagine someone not being able to tell from the name what Toyota is about. But on the other hand, there are few who know Toyota actually, from where and how it evolved, secret behind its success. So this report talks about the real Toyota and also analyses it critically. Toyota is one of the world's largest automobile manufacturers, selling over 9 million models in all five continents. A Top 10 Fortune Global 500* enterprise, Toyota ranks among the world's leading global corporations and is proud to be the most admired automaker, an achievement the company believes stems from its dedication to customer satisfaction. Toyota has been shaped by a set of values and principles that have their roots in the company's formative years in Japan.

(*As published in the new edition of Fortune magazine)

Toyota Motor CorporationToyota abbreviated as TMC, is a multinational corporation headquartered in Japan. TMC has now become undoubtedly the world's largest automobile manufacturer by sales and production. The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota Motor Corporation group companies are Toyota (including the Scion brand), Lexus, Daihatsu and Hino Motors, along with several "non-automotive" companies. TMC is part of the Toyota Group, one of the largest conglomerates in the world. Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. In addition to manufacturing automobiles, Toyota provides financial services through its Toyota Financial Services division and also builds robots.

The story of Toyota Motor Corporation began in September 1933 when Toyoda Automatic Loom created a new division devoted to the production of automobiles. Quickly thereafter, the division produced its first Type A Engine in 1934, which in turn was used for the production of the first Model A1 passenger in May 1935 and the G1 truck in August 1935. Production of the model AA passenger started in 1936.

Designing the LogoToyota Motor Co. was established as an independent company in 1937. Although the founding family name is Toyoda, the company name was changed to:

Signify the separation of the founders' work life from life

Simplify the pronunciation, and

Give the company an auspicious beginning.

Toyota is considered luckier than Toyoda in Japan, where eight-stroke count in the Japanese language was associated with wealth and good fortune.

The original logo no longer is found on its vehicles but remains the corporate emblem used in Japan. Still, there were no guidelines for the use of the brand name, "TOYOTA", which was used throughout most of the world, which led to inconsistencies in its worldwide marketing campaigns. To remedy this, Toyota introduced a new worldwide logo in 1989 in conjunction with and to differentiate it from the newly released luxury Lexus brand. There are three ovals in the new logo that combine to form the letter "T", which stands for Toyota. The overlapping of the two perpendicular ovals inside the larger oval represent the mutually beneficial relationship and trust that is placed between the customer and the company while the larger oval that surrounds both of these inner ovals represent the "global expansion of Toyota's technology and unlimited potential for the future."

Start of Commercial Production 1947Commercial passenger production started in 1947 with the model SA. In 1950 a separate sales company Toyota Motor Sales Co. was established (which lasted until July 1982). In April 1956 the Toyota dealer chain was established. Today Toyota is one of the top manufacturers with large market shares in both the US and Europe. It has a small division, selling under the Daihatsu brand as well as a heavy vehicle division, selling under the Hino brand.

Toyota is Japan's biggest company and the second largest in the world (the larger being General Motors). The company is immensely profitable, and its massive reserves dwarf those of many countries. Toyota's vehicles are generally highly regarded for their quality, proficient engineering, and value; but their designs are often viewed as visually bland and lacking the flair seen in cars from certain smaller manufacturers. Toyota offers one of the largest ranges of vehicles of any manufacturer and amongst its more predictable high-volume models produces a number of exciting sports cars: the Celica, the MR2, and the Supra, the latter which was discontinued in 1998 for export and in 2002 in Japan altogether.

Toyota the World LeaderToyota is aiming cost effective productions with JIT system, which has lately started in China and all around the world. Additionally the products which are offered are high tech developed with high reliability with moderate pricing than its counterparts.

JIT – Just In TimeToyota is the benchmark in manufacturing and product development in automobile industry. The early adoption of JIT principles by Toyota seemed to have helped the company to achieve significant success. It helped the company respond quickly to changing customer needs and offer high quality products at low costs, thus increasing customer satisfaction. JIT system is Toyota's greatest asset in global market competition that other leading automakers like Mercedes-Benz, Honda and Chrysler excelled in advanced engineering techniques, engine technology and styling, they did not match Toyota in efficiency, productivity and quality.

JIT was used not only in manufacturing but also in product development, supplier relations and distribution. Despite imitating Toyota's JIT for many years, no other automaker in the world had been able to make their production systems and processes as efficient as Toyota had done.

The beginning of the system goes to late 30`s when Kiichiro Toyoda (the founder of Toyota) devised a system wherein each process in the assembly line of production would produce only the number of parts needed at the next step on the production line, which made logistics management easier as material was procured according to consumption.

This system was referred to as Just-in-Time (JIT) within the Toyota Group. The JIT production was defined as 'producing only necessary units in a necessary quantity at a necessary time resulting in decreased excess inventories and excess workforce, thereby increasing productivity.'

Lean ProductionThe famous Lean production techniques were originally developed by Toyota as a route to cost-effective mass-customisation. The key principles include cutting waste in all parts of the value chain and giving every worker the right to stop the production line when he or she finds a mistake. Rather than reworking individual cars, Toyota workers are allowed to stop production and work together to fix the underlying problem. Toyota created a value chain of linked suppliers, all of whom have a clear stake in making the company more successful and they all continue to enjoy the rewards of the greater efficiencies brought about by Lean production system.

Toyota's Global Marketing Strategies

Americans loves big houses and big cars and that's why main players in car making industry (US based) such as GM, Ford and Chrysler were manufacturing big cars with high fuel consumptions. On the other hand the Japanese automakers are doing fine with the boosting market share in US as climbing oil prices make fuel efficient models such as Toyota Corolla and Honda Civic increasingly attractive. With the lead of Toyota, Japanese companies started to provide economy cars with basic needs of the driver in order to reach firstly to middle class, because the middle class is the majority in the social hierarchy.

Today, Toyota is recognised not only from middle class, it has loyalty from every segments of the society in all around the world. One of the reason is, Toyota is offering products to all types of market. Lexus for luxury choice, Matrix for youngsters, Prius for family car, Trucks for mainly for US and 4 x 4 for adventurers and many more. The main similarity of these cars is reliability. Toyota have built up great loyalty with its customers by offering them moderate price cars with high tech developments such as ABS brake systems, side-impact and head-curtain air bags, anti-skid control; shortly any technological development that car manufacturers are offering also addition with fuel efficient motors. Toyota is likely to continue to get a big lift from the growing global interest in fuel efficiency. The sale of hybrid version of Camry is getting a lot of interest in US.

New Marketing Strategy"Some marketers have worked to make their brand messages so enjoyable that consumers might see them as entertainment instead of an intrusion." (Global Brands 2005) For instance, Toyota is not spending its budget for dull and bulk advertisements on TV in order to persuade its target market, it is trying to create a strong brand image by doing reality show "The Contender" rather than just lending support during commercial breaks. According to Global Brands 2005, Toyota, "whose brand value rose 10%, paid $16 million to have its vehicles be part of the storyline on NBC reality show The Contender, about small-time boxers competing for a nationally televised bout, The grand prize: a million dollars and a Toyota truck." On the other hand rival Nissan has increased its sales up 13% by parking Titan pickups in front of houses in hit ABC show Desperate Housewives. These approaches have seen in the past, which have worked for its purpose. Aston Martin and Omega in James Bond, Coca Cola and Mc Donald's in World Cup football competitions and many more appeared in special events or occasions in order to increase public awareness about their products.

TOYOTA’s Non Automotive Activities:

AerospaceToyota is a minority shareholder in Mitsubishi Aircraft Corporation, having invested US$67.2 million in the new venture which will produce the Mitsubishi Regional Jet, slated for first deliveries in 2013. Toyota has also studied participation in the general aviation market and contracted with Scaled Composites to produce a proof-of-concept aircraft, the TAA-1 in 2002.

PhilanthropyThe Toyota Municipal Museum of Art in Aichi, sponsored by the manufacturer. Toyota is supporter of the Toyota Family Literacy Program along with National Center for Family Literacy, helping low-income community members for education, United Negro College Fund (40 annual scholarships), National Underground Railroad Freedom Center (US$1 million) among others. Toyota created the Toyota USA Foundation.

Higher educationToyota established the Toyota Technological Institute in 1981, as Sakichi Toyoda had planned to establish a university as soon as he and Toyota became successful. Toyota Technological Institute founded the Toyota Technological Institute at Chicago in 2003. Toyota is supporter of the "Toyota Driving Expectations Program," "Toyota Youth for Understanding Summer Exchange Scholarship Program," "Toyota International Teacher Program," "Toyota TAPESTRY," "Toyota Community Scholars" (scholarship for high school students), "United States Hispanic Chamber of Commerce Internship Program," and "Toyota Funded Scholarship." It has contributed to a number of local education and scholarship programs for the University of Kentucky, Indiana, and others.

RoboticsIn 2004, Toyota showcased its trumpet-playing robot. Toyota has been developing multitask robots destined for elderly care, manufacturing, and entertainment. A specific example of Toyota's involvement in robotics for the elderly is the Brain Machine Interface. Designed for use with wheelchairs, it "allows a person to control an electric wheelchair accurately, almost in real-time", with his mind. The thought controls allow the wheelchair to go left, right and forward with a delay between thought and movement of just 125 milliseconds.

FinanceToyota Financial Services Corporation provides financing to Toyota customers.

Agricultural biotechnologyToyota invests in several small start-up businesses and partnerships in biotechnology

Automobile Sector in PakistanAutomobile sector is one of the fastest growing sectors in Pakistan. It contributes towards the nation’s economy in the form of Technology Transfer, Employment, Investment and much more. Automobile sector contributed over Rs.23 billion to the national exchequer in the year 2003-04.

As the industry's growing, so are the Automobile companies. Every manufacturer is in the process of increasing production capacity to meet customer demands. Throughout the 90's the annual automobile production remained constant around 45,000 but due to consistent policies and positive macro economic conditions the industry boomed to over 120,000 units per annum in just 4 years.

(www.pama.org.pk)

TOYOTA INDUS MOTOR COMPANY LTD.Indus Motor Company (IMC) is a joint venture between the House of Habib , Toyota Motor Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu Motor Company Ltd. vehicles in Pakistan through its dealership network.

The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. 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.

IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachi in an area measuring over 105 acres. Indus Motor Company’s plant is the only manufacturing site in the world where both Toyota and Daihatsu brands are being manufactured. Heavy investment was made to build its production facilities based on state of art technologies. To ensure highest level of productivity world-renowned Toyota Production Systems are implemented. IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota Hilux Single Cabin 4x2 and 4 versions of Daihatsu Cuore. Toyota also have a wide range of imported vehicles.

Just in Time spirit implies two opposing forces of providing fast and flexible response to customers, yet building efficient mechanisms and systems that are efficient and waste-free. The concept is to provide the right product and information, at the right time, in the right amount, in the right manner, while maintaining high standards of efficiency and cost control. Toyota have to practice this contradictory idea in our daily activities.

Vision and Mission:"IMC’s Vision is 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".

The most respected.

The most successful.

Delighting customers.

Wide range of products.

The best people.

The best technology.

Mission of Toyota is to provide safe & sound journey. Toyota is developing various new technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world.

“Action Commitment Teamwork for becoming # 1 in Pakistan”

Means a committed team to make Indus # 1 in:

Respect and Corporate Image Customer Satisfaction Quantity in Production & Sales Quality Profitability Best Employer

Toyota as a BrandThe positioning of a brand is done keeping in mind where the company wants the people to see the brand and where exactly do they want the brand to go. The positioning is an important part of the Global Vision of the company.

Toyota’s Brand Communication talks about “Moving Forward”

This tagline embodies the spirit of constant innovation on the part of Toyota. It lends the associations of quality and technological capability to the brand.

In Pakistan Toyota has a tagline “Quality Revolution” which signifies unmatched quality.

Toyota Brand Positioning:• Majestic

• Quality

• Commitment to improving society

• Innovation in Technology

Toyota Brand Image:People associate Toyota with:

• Quality

• Value for money

• Ecofriendly

Toyota Brand successThe reasons for its success could be attributed to the following factors:

• Successful brand - Toyota has developed a trusted brand based on quality, good performance and for being environmentally friendly.

• Innovation - Toyota is at the forefront of car manufacturing innovation. It was the first car manufacturer to embrace lean manufacturing (known as Toyota Production System) which is a faster, more efficient process which leads to less waste compared to the traditional batch and queue method of manufacturing. It also applied JIT (Just in Time manufacturing) and smart automation. Toyota has moved to a global manufacturing model. It successfully localizes the production to cut costs.

• Product Development - Key to the success in the car market is new models, which stimulate demand and loyalty to the Toyota brand. Toyota has reputation for producing cars that are greener, more fuel efficient, and of good performance. Toyota has sought to meet government requirements (for reducing the impact on the environment), economic changes (as prices of fuel - oil continues to rise) through the development of hybrid fuels. Toyota was the first car manufacturer to market hybrid (gas and electric) fuel, with the launch of Prius model, ahead of competitors.

• Market Focused Strategy - Toyota has different strategies for different markets Eg: In the developing Asian markets, it relies on affordable cars and Multi Utility vehicles. Whereas, in a market like North America, new product launches have been key as innovation is a motivating factor for people to buy products and for the company to stay ahead of its competition. The European Market, on the other hand is heavily dependent on Integrated Manufacturing and Marketing.

• Iconic Brands - It successfully created iconic independent brands such as the Corolla, Camry and Land Cruiser; and innovated them in order to maintain their brand equity.

• Brand Extensions - It has also created successful brand extensions such as Lexus in order to widen its portfolio

Toyota Indus Product PortfolioToyota currently product offerings which Toyota has in Pakistan fall in two types of categories locally assembled vehicles and imported vehicles. The major portion of the Pakistan automobile sector is dominated by the locally assembled vehicles.

Locally assembled Corolla Coure Hilux

Imported Vehicles Camry Land Cruiser Prado Fortuner Avanza Terios

SEGMENT TOYOTA COMPETITORS

Segment1 ( Rs. 5-7 lakhs)

Entry level small car

Daihatsu Coure Suzuki Mehran

Suzuki Alto

Segment 2 (Rs 7-10 lakhs)

Premium hatchbacks

No offering Suzuki Swift

Suzuki Cultus

Segment 3 (Rs 10-18 lakhs) Compact sedans

Toyota Corolla Honda Civic

Chevrolet Optra

Mitsubishi Lancer

Nissan Sunny

Honda City

Suzuki Liana

Segment 4(Rs 20 above lakhs)

Executive sedans

Toyota Camry Honda Accord

Segment 5(Rs 10-15 lakhs)

Multi Purpose Vehicle

No offerings Suzuki APV

Segment 6(Rs 20 lakhs plus): SUV/ Pick up truck

Toyota Hilux

Toyota Prado

Toyota Landcruiser

Mitsubishi Pajero

Honda CR-V

From the above table, it is clear that Toyota has the most competition in segment 3, which is compact Sedans segment. This is the segment in which corolla has proven itself unbeatable.

BRAND ARCHITECTURE:Brand architecture is the structure of brands within an organizational entity. It is the way in which the brands within a company’s portfolio are related to, and differentiated from, one another. The architecture should define the different leagues of branding within the organization; how the corporate brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the core purpose of the corporate brand to which they belong.

TOYOTA COROLLA Toyota Corolla follows Endorser Brand Architecture; here by looking at the rear view of the vehicle, Mother Brand is on level with Daughter Brand i.e. Corolla. Now it can be easily communicated that Toyota wishes to endorse this Brand as its reputation gets transferred to Brand Corolla. Toyota is known for quality and has established this reputation all across globe. Hence, Endorsement Brand Strategy is best suitable for Corolla.

TOYOTA CAMRYIndividual branding, also called individual product branding or multi-branding, is the marketing strategy of giving each product in a portfolio its own unique brand name. This contrasts with branding, corporate, and umbrella branding in which the products in a product line are given a single overarching brand name. The advantage of individual branding is that each product has an image and identity that is unique. This facilitates the positioning of each product, by allowing a firm to position its brands differently.

Toyota Camry is having Individual Product Branding as we see the rear side of the vehicle, we will find Camry written on the left hand side, where as the mother brand Toyota is not there, Camry comes under Luxury Brand and having its own brand Identity. Hence, Individual Product Branding is best in case of Camry.

DAIHATSU COURE Daihatsu is a subsidiary of Toyota Motor Corporation, it separate identity is kept this way (by the name of Daihatsu) to create a differentiation between Toyota and Daihatsu image. As Corolla is positioned as a family Sedan and comes in a large category which is endorsed directly to the name of TOYOTA, but Daihatsu Coure falls in the small car category, so Toyota has kept Daihatsu as a spate entity so that it does not coincides with the overall image of Toyota and both run smoothly in perfect synchronization. So by keeping Daihatsu’s identity alive Toyota has targeting a huge small car market in Pakistan with a very healthy effect over the brand as a whole.

BRAND POSITIONING AND IMAGE

TOYOTA COROLLA:The Corolla is a line of compact/ sub compact cars manufactured by Toyota. For the Pakistani market, it is positioned in the B+/ C segment. It has become very popular throughout the world since the nameplate was first introduced in 1966. In 1997, the Corolla became the best selling nameplate in the world, with over 35 million sold as of 2007. Over the past 40 years, one Corolla car has been sold on average every 40 seconds. The series has undergone several major redesigns. The Corolla is currently in its 10th generation.

BRAND PERSONALITY: The key behavioral traits that define the Corolla’s personality are:

• Safe

• Dependable

• Elegant

BRAND POSITIONING: The Corolla is positioned as the best compact sedan. In the Pakistani market, it is positioned as a safe, advanced and spacious car with a superior driving experience.

BRAND IMAGE: In the dipstick study that we conducted, its brand image was found to be:

• A very reliable car that is an all rounder

• A low maintenance and it for a hassle free owner experience

• A value for money with its sufficient power and decent looks

• It is image is that of being a bit unexciting and plain

TOYOTA CAMRYToyota Camry as a brand has been around for more than 28 years and has undergone six generation changes. It has grown from a basic family car into a more sporty, powerful and luxurious one over the generations. It is the largest selling sedan in the US and it retains its unique proposition of technological innovation along with affordable luxury.

BRAND PERSONALITY: The key behavioral traits that define the Camry’s personality are:

• Stylish

• Powerful

• Sophisticated

• Plush

BRAND POSITIONING: The Toyota Camry as a brand is positioned as a technologically advanced, powerful and stylish luxury sedan in the Pakistani market. It’s positioning in the luxury segment has a good value proposition wherein it is priced much below competitors like Mercedes and BMW in the same segment and on par with models from Honda and Ford.


• Performance Luxury sedan

• Style statement

• Technology packed

Here, we see that the brand positioning and image match to a great extent.

DAIHATSU COURE From the world of Toyota comes a quality product Daihatsu Cuore. Using superior Japanese technology and designed with the needs of drivers in mind, the Daihatsu Cuore offers unmatched performance, consistent reliability, driving comfort and safety. Coure is positioned specially to target the small car segment in Pakistan.

BRAND PERSONALITY: The key behavioral traits that define the Coure’s personality are:

• Versatile

• Economical

• Trendy

BRAND POSITIONING: The basic positioning of Coure is as a getaway vehicle that is compact in its small car category, trendy and up market. It is positioned as a vehicle for all purposes, specially for driving with in

the city with a comfortable and economical ride The brand uses the tagline “All you desire” and the ads are also catchy. Coure give the maximum value to the costumers in its category than any other car in the Pakistani automobile market.


• Economical and sturdy vehicle

• Car level comfort and refinement

• Practical and affordable

• Multipurpose within city

Here we see that the brand image matches the positioning in three aspects. And its puts coure in the small car category in such a way that you can get more or less all the benefits that you get from a large car or sedan car category.

External and Internal Forces on TOYOTA INDUS:

Problems highlighted (Internationally & locally)

Being big has its own problems. The World market for cars is in a condition of oversupply and so car manufacturers need to make sure that it is their models that consumers want. Therefore it is exposed to fluctuating economic and political conditions those markets. Perhaps that is why the company is beginning to shift its attentions to the emerging new markets.

Movements in exchange rates could see the already narrow margins in the car market being reduced. Toyota produces most of its cars in Japan whereas competitors may be more strategically located worldwide to take advantage of global efficiency gains. Even the Toyota automobiles which are being assembled in Pakistan are prone to these exchange rates, rupee is continuously devaluing against the Japanese Yen and US dollar. This makes the end price to rise, stretching the affordability of the local people till its last limit.

The company needs to keep producing cars in order to retain its operational efficiency. Car plants represent a huge investment in expensive fixed costs, as well as the high costs of training and retaining labor. So if the car market experiences a down turn, the company could see over capacity. If on the other hand the car market experiences an

upturn, then the company may miss out on potential sales due to under capacity i.e. it takes time to accommodate. This is a typical problem with high volume car manufacturing.

Threats to TOYOTA Product recalls are always a problem for vehicle manufacturers. In 2005 the company

had to recall 880,00 sports utility vehicles and pick up trucks due to faulty front suspension systems. Toyota did not give details of how much the recall would cost.

As with any car manufacturer, Toyota faces tremendous competitive rivalry in the car market. Competition is increasing almost daily, with new entrants coming into the market from China, South Korea and new plants in Eastern Europe.

The company is also exposed to any movement in the price of raw materials such as rubber, steel and fuel.

Economic Threats:These economic factors are potential threats for Toyota:

Saturation and increased competition, intense marketing campaigns increasing competitive pressures.

Shifts in the exchange rates affecting profits and cost of raw materials. Predictions of a downturn in the economy e.g. recession, will affect car purchases

(especially new cars). As household budgets tighten - this could lead a decline in new car sales and possible rationalization of dealerships.

Changing demographics e.g. number of large families is declining. Undermining the demand for large family cars.

Changing usage - families using the car less for taking children to schools. Home deliveries. Businesses - restricting business travel (tele-conferencing). Governments encouraging alternative forms of transport - cycling and incentives to use public transport across Europe.

Rising oil prices (fuel costs) and the costs of maintaining cars. Increase in families who have chosen not to own a car, or decided to use their car less.

Recent 2007–2010 financial crisisOn May 8, 2009, Toyota reported a record annual net loss of US$4.2 billion, making it the latest automobile maker to be severely affected by the 2007–2010 financial crises. From November 2009 through the first quarter of 2010, Toyota recalled more than 8 million (accounts differ) cars and trucks worldwide in several recall campaigns, and briefly halted production and sales.

The US Sales Chief, James Lentz, was questioned by the United States Congress committees on Oversight and Investigations on February 23, 2010, as a result of recent recalls. On February 24, 2010, Toyota CEO Akio Toyoda testified before the House Committee on Oversight and Government Reform. On 6 April 2010, The US government sought a record penalty of US$16.375 million from Toyota for its delayed response in notifying the National Highway Traffic Safety Administration regarding the defective accelerator pedals On 18 May 2010, Toyota paid the fine without an admission of wrongdoing. The record fine and the high profile hearings caused accusations of conflict of interest. The US government is regulatory body and part owner of two major competitors, General Motors and Chrysler. Senior managing director Takahiko Ijichi said that recall-related costs in the financial year that ended March 2010 totaled US$1.93 billion (¥180 billion).

Recommendation: As TOYOTA are the first to develop commercial mass-produced hybrid gas-electric vehicles (gas

and electric), e.g. Prius model. Based on advanced technologies and R&D activity. With oil prices at an all time high - this investment and widening of product portfolio fits consumers looking to alternative sources of fuels away from gas guzzling cars. So they can introduce Prius model in Pakistan, as a huge market is waiting for an effort like this

To expand more aggressively into new segments of the market. The launch of Aygo model by Toyota is intended to take market share in youth market. This could be a profitable launch in the Asian market including Pakistan

To produce cars which are more fuel efficient, have greater performance and less impact on the environment.

Toyota should continue its global expansion - especially in the emerging markets Toyota should adopt the defensive marketing strategy because as being the second largest car producer in the international market. Toyota must at the moment carry out a feasibility study for launching a vehicle in

the domestic market where it has models like the Innova and Camry amongstothers.

Toyota should conduct market survey in Pakistan market for quails in order to know the perception of Pakistani consumers. Toyota should adopt an offensive marketing strategy for entering in the small car

segment. This market is dominated by Suzuki Mehran and Alto in the Pakistani domestic auto market.

Toyota must plan out an ideal marketing producing capacity, becaue it faces the problem of over and under capacity in case of upturn and downturn of the market

Advertising the new systemTraining user with new skills and knowledgeAchieving Global reachMonopoly issue

The shape of car as customer perceive need to be changed by the Toyota because people believe that every new model of Toyota is like the old one.

Interior of the car of Toyota, which mostly people of Pakistan do not much like, needed to be changed

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