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Toyota Production Vs Demand
Toyota Production Vs Demand
Assemble to order: In products like automobiles where multiple product options exist, and the
customer is not willing to wait until the product is made, manufacturers produce or buy and
stock standard component parts (Ambe, Intaher ,2011).When manufacturers receive an order
from a customer or dealer, they assemble the component parts from inventory according to the
order. Since the components are stocked, the firm needs only time to assemble before
delivering to the customer.
Toyota Kirloskar Motor sold a total of 12335 units in the domestic market in September
2017. The company exported 1343 units of the Etios series this month thus clocking a total of
13,678 units registering 2% growth as compared to same period last year. The festive season
has given the purchasing impression of the customer a favourable boost. Customer orders
remained solid despite the product cost hike in line with this month's cess hike. New Fortuner
saw overwhelming demand from customers even after the effect of price increase and a year
after its launch. (Toyota Bharath,2017)
A similar strategy was followed in 2018 as well. The gross domestic sales of TKM was
13113 units on May 2018. And 827 units were exported this month thus clocking a total of
13940 units. In May 2017, the domestic sales were 10914 units and 1425 units of the Etios
series was exported. (Rushlane, May 2017)
Along with the segment leading products Fortuner and Innova Crysta, introduction of
Yaris played a significant role in contributing to the overall positive sales growth as compared
to the same period last year. In July 2018, Toyota Kirloskar Motor (TKM) reportedly witnessed
a 23 per cent drop in sales with 13,677 units as compared to 17,750 units in July 2017. In terms
of exports, Toyota has shipped 747 units of the Etios series this July, thereby taking the total
sales number to 14,424 units. In the same month last year, the company had exported 1,723
units of the Etios series, thereby witnessing a decline of 56.64 per cent in July 2018. The Innova
Crysta has reportedly been the highest contributor in June-July 2018 with 21 per cent growth
as compared to the same period in 2017. However, considering the pre and post GST months
of June-July 2017 and its effects, the company has now reported a bimonthly sales growth of
36 per cent in June – July 2018. (Puthran, N. (2018, August 02))
2019 was not a good year for automobile industry. There were dips in sales during
January to March 2019 compared to last year. This was because of Supreme Court’s order
mandating BS-VI from April 2020 and banning all the car manufacturers from selling cars with
older BS-standards since then. The global economic slowdown and lack of credit for vehicles
are weakening the demand. Hence the companies have to clear their old stocks. So they are
providing offers and discounts to push the sales.
Toyota also got a push in its sales, thanks to its newly launched Glanza. Because of
overstock Toyota had to reduce the number of cars manufactured per day. This was done by
operating the plant for single shift and reducing the takt time to 2.63 minutes, thereby producing
175 cars per day. Toyota Kirloskar Motor (TKM) reported a decline of 17.72 % in total sales
in April to 11,413 units. The company sold a total of 13,871 units last year. Last month's
domestic sales were 10,112 units compared to 13,037 units in April 2018, a 22.43 % decrease.
Due to the uncertainty of general elections looming over the economy, the sector encountered
a slowdown and this slow pace persisted till the new government was established. Consumer
feelings have been dampened by a number of variables, such as tight liquidity, heavy insurance
and high expenses (Economic Times,2019).
References
[1] Ambe, Intaher & Badenhorst-Weiss, Johanna. (2011). An automotive supply chain model for
10.4102/jtscm.v5i1.18.
14000-units-in-october.html
[3] Bharat Stage VI norms: Know how they will impact you. (2018, October 25). Retrieved from
https://economictimes.indiatimes.com/industry/auto/cars-uvs/bharat-stage-vi-norms-know-
how-they-will-impact-you/articleshow/66362907.cms
[4] Home | Team-BHP - The Definitive Indian Car Website. (n.d.). Retrieved from
http://www.team-bhp.com/
[5] Ians. (2018, December 01). Toyota Kirloskar Motor posts 15% dip in November sales on
standard.com/article/companies/toyota-kirloskar-motor-posts-15-dip-in-november-sales-on-
rising-fuel-costs-118120100535_1.html
[6] Pti. (2018, August 31). Toyota Kirloskar sales up 11.47% in August - Times of India.
sales-up-11-47-in-august/articleshow/65626468.cms
[7] Puthran, N. (2018, August 02). Toyota Kirloskar Motor witnesses 23 per cent drop in sales in
witnesses-23-per-cent-drop-in-sales-in-july-136263.html
[8] Sukesh. (2017, August 01). Toyota India Achieves Best Ever Monthly Sales In July 2017.
july-023196.html
[10] Toyota May 2019 sales decline - Over 2,600 Glanza dispatched to dealers. (2019, June 01).