Indus Motor Company

Strategic Management – Group Report

Hammad Siddiqui - Niha Shaikh - Saad Ahmed Zara
Naveed – Syeda Fizza Abbas

Ms. Farheen Khalid 5/18/21 Strategic Management

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Table of Contents

Introduction................................................................................................................................2

Toyota Mission Vision and Core Values...................................................................................3

Mission Statement:.................................................................................................................3

Vision Statement:...................................................................................................................4

Core Values:...........................................................................................................................4

Business Model..........................................................................................................................5

Comparison of Business Model with Competitors....................................................................5

Toyota Growth Rate and Production Line.................................................................................6

 Local Market...................................................................................................................6

 International....................................................................................................................7

Current Issues and Problems......................................................................................................7

Strategy Levels...........................................................................................................................8

Corporate Level Strategy.......................................................................................................8

Business Level Strategy.........................................................................................................9

Functional Level Strategy......................................................................................................9

SWOT Analysis of IMC.............................................................................................................9

PESTEL Analysis of IMC........................................................................................................11

Future Prospects of the IMC – External environment and Competitors..................................13

Key Success Factors of Toyota Corporation............................................................................13

Conclusion and Recommendations..........................................................................................15

References................................................................................................................................16

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Introduction

Indus Motor Company Limited (IMC) is a collaborative effort between Toyota Motor
Corporation (TMC) and Toyota Tsusho Corporation (TTC) of Japan, as well as some
companies of Pakistan's House of Habib. The company, which was established in 1989,
produces and sells Toyota vehicles in Pakistan. In the passenger car category, these include
many versions of the bestselling ‘Corolla' and the newly introduced “Yaris,” in the light
commercial vehicle segment, and the Sports Utility Vehicle segment, “Hilux” and
“Fortuner.”

The manufacturing facility and offices of IMC are situated on a 107-acre site in Karachi's
Port Qassim. The commodity is distributed to end-users around the country through a strong
network of 46 independent 3S Dealerships.

IMC has sold over 903,800 CBU/CKD vehicles since its inception 30 years ago. In terms of
volumetric increase, it has also shown steady growth. The Company's daily production
capacity has now risen to 268 (with overtime) units per day, up from a humble beginning of

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20 vehicles per day in 1993. This has been achieved by the existence of human talent that
supports Toyota's quality and lean manufacturing values.

IMC has invested heavily in expanding its own capability as well as satisfying consumer
demand for new goods. In Pakistan, the Toyota Corolla is the most common automobile
brand. This country sells the most Corollas in the Asia-Pacific region and is Toyota's largest
market in Asia.

At the end of the year, the company employed 2,855 employees. It devotes significant
resources to educating team members and management personnel, as well as to cultivate a
community of high-performing, motivated teams that collaborate seamlessly through
processes in the pursuit of quality and continuous improvement.

Employees at IMC are expected to follow high standards of business integrity and protection
in line with the Company's core values; they collaborate freely by communicating negative
news first and treat others with respect. According to the bi-annual TMC morale survey,
employees rate IMC highly in terms of work factors and employee performance.

IMC has contributed greatly to the growth of the local auto industry's entire value chain. It is
also proud to have helped reduce poverty at the community level by promoting localization.
As a result, thousands of jobs have been generated and technology has been transferred to 52
vendors who supply components. The company is also a big taxpayer and donor to the
government's reserves.

Toyota Mission Vision and Core Values.

Mission Statement:

A mission statement is about how to define a company overall existence its long-term goals
the company services and products which they are offering or provide to its customers.
Toyota Company mission is defining the company long term objective to create maximum
profits for the sake of the shareholders and for the company benefits.

Toyota Motors is looking to create a more affluent society for car manufacturing and the
putting themselves in the first position in the customer’s choice, to providing problem
handling solution towards material and going for more innovative methods to provide more
convenience for its customers.

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Furthermore, for the purpose to create real value to their businesses they choose their
customer for the first choice to provide products and services and quality.

Vision Statement:

This is about that where your business or company at specific point and where you want to be
in future called vision statement, so the Toyota Company clearly defines its vision that
beneficial for the society living standards to providing new innovative and conventional
technology, they are moving towards the new technology and taking initiative for
manufacturing the ECO-Cars for provide better environment and help us out in the low
carbon environment, the company aims for the growth and stability and long term economy
and harmony with environment and its local communities they serve and based on its
stakeholders.

Moreover, Toyota Company has now become more successful day by day in the marketplace
because of its positioned and best purchasing power, offering its products to its loyal
customer with great experience.

Core Values:

The Toyota Company provides the best and world class quality cars for its customers and
also provide high class production facility, for the purpose of goal achievement their first
priority is their clients and their satisfaction to the products.

Toyota company provide best environment to its employees as well as employers as they are
focused on the spirit of teamwork and motivation, they also value to their ethical norm’s rules
and regulations and the honest practices which is implemented to everyone in the company.
Company believes that for the organizational achievement and its performance the teamwork
is most important.

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Business Model

Indus Motor Company also known as IMC is a Public Limited Company and is a joint
venture between House of Habib, Toyota Tsusho Corporation and Toyota Motor Corporation.
It was established in Karachi, Pakistan since 1989.

It is an exclusive assembler and distributor for Toyota vehicles in Pakistan. IMC also has a
service agreement with Daihatsu Motor Company and sells Daihatsu Vehicles, auto parts and
accessories in Pakistan.

The company employs a network of vendors and dealerships. The vendors are responsible for
producing various parts and components for the vehicles locally and internationally. Once
assembled, the vehicles are sold via 3S dealerships appointed under a renewable contract.
The dealers operate under terms and conditions as prescribed by IMC and earn set
commission on vehicle sales, parts sales and vehicle service. Currently, Toyota is selling cars
through its 50 dealerships all across Pakistan and it intends to open up 4 more in the next
fiscal year.

With the establishment of Indus Motor Company in Pakistan’s economy, it has been
developing many vendors locally in order to localized the auto parts to minimize the cost of
vehicles. Many automotive parts are either imported or produced locally in Pakistan. Similar
case is with the vehicles. Some vehicles like Yaris, Corolla, Fortuner and Revo are locally
assembled cars which are known as Completely Knocked Down (CKD) Vehicles whereas,
vehicles like Land Cruiser, Prado, HiAce, Coasters, Rush etc are known as Completely Built-
Up vehicles which are imported units.

These units are then sold to customers through Toyota dealerships. IMC follows a Just in
time production system where the production only takes place on the basis of real customer
orders. Customer are given delivery lead time upon the booking of their vehicles. However,
the production is based on very well-known sales forecasts of each variant and thorough
competition analysis for each brand.

IMC has strict policies for the exclusivity of its dealers. Toyota dealers are not allowed to
form any sort of alliance or have any association with the competitors, they are not allowed to
have dealerships of other brands, this violates their agreement with IMC.

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Comparison of Business Model with Competitors

The most perceptible companies that fits in the profile to be considered as the competitors of
IMC are Honda Atlas & Pak Suzuki Motors.

Honda Atlas Pvt. Ltd. is a joint venture between Atlas Group of Companies and Honda Japan
since 1992 and was introduced into stock exchange of Karachi, Islamabad & Lahore in 1994.
Since then, Honda Atlas has remarkably sold an average of more than 200,000 cars in
Pakistan. Being a part of an international automobile industry Honda concentrates on using
the same standard while making all of its dealerships. It has 72 dealer networks all over the
country whereas, IMC has a total of 50 dealerships. Alike IMC, Honda encourages local
vendors for the production of parts that are required for the construction of vehicles while
prioritizing over quality standards. The products that Honda is offering locally are Honda
City, Honda BR-V, Honda Civic, Honda CR-V, Accord. Honda provides its customers the
service to book their cars online for a hassle-free customer service.

The other competitor of IMC is Pak Suzuki which enjoys the image of selling quality
products with a competitive price in the market. Initially, the organization was a collaboration
between Government of Pakistan & Suzuki Motors Japan which was later privatized in 2002
where it produced 500,000 cars annually. Later, due to high recession in the economy its
production of cars has now declined to 150,000 per year. It has 77 dealership spreads around
the country making it the largest dealer network of Pakistan which focuses on small, medium
sized and light vehicles. It has successfully grabbed a huge customer market by producing
high quality and cost-efficient vehicles which has become its competitive advantage in the
automobile industry in Pakistan.

Toyota Growth Rate and Production Line

 Local Market.

Toyota Indus motor Limited (IMC) is merged in house of Habib companies of Pakistan with
linked to the Toyota Motor Corporation TMC and TTC Toyota Tsusho Corporation of Japan,
with integration in 1989. In Pakistan top brand vehicles and Mass production line and Market
of Toyota. In the variants of highlighted vehicle so it is corolla and the newly introduced car
Yaris in the targeted segment of customer passenger, on the based on the light segmented
market so Hilux and Fortuner are included in the sport vehicle segment.

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IMC growth production offices are located in Port Qassim Karachi used at a 107-acre Site.
The finished product is delivered to the end customer across the nation on a strong based
system. On the Large scale of production facility and its very own customer demand for the
new enhanced products Toyota put the large number of investments. According to the
research and market survey Corolla is the one and top selling model in Pakistan. One of the
greatest selling models in Asia Pacific and also has positioned 1 distinction in Toyota Asian
market. IMC play important role in the local automobile industry and boost economy of
Pakistan to produces local procurement and parts and materials for the jobs creation purpose
also (Ahmed, 2013).

 International

Indus Motors is a joint venture between House of Habib Pakistan Toyota Motor Corporation
and Toyota Tsusho Corporation – Japan. Toyota Motors Corporation is an international
manufacturer of automobiles since 1937. It is recognized worldwide as the second largest
manufacturer of automotive products and being sixth largest in terms of revenue. It has
produced over 10 million vehicles since 2012 which made them the market leaders
internationally. It has five brands, namely, Hino, Ranz, Daihatsu, Lexus and Toyota brand.

Toyota has built an image of a market leader worldwide in the automobile industry for its
hydrogen fuel cell and hybrid electric vehicles and also achieved 10 million global sales in
2017 for Toyota and Hybrid vehicles.

Toyota successfully captured its lower wage cost market in European markets with an
increasing sale each year and created 200,000 new jobs in the market. It has also captured
Northern America and made steady sales with a steady profit per vehicle. In Australia,
production of its Hybrid cars started in 2010 and produced 10,000 units a year at its southern
eastern Australian plant which made Toyota popular for its hybrid vehicles.

Toyota Motors Corporation has a slogan of “Think global, act local” which has helped the
organization to penetrate international automobile market. It made investments into stable
countries, worked locally with local hired employees and local dealers and fully managed to
survive (Majid, 2019).

Current Issues and Problems

Globally the industry in Pakistan still lags behind in terms of R&D, quality, safety and
affordability. Despite the boom, it can only be expected that without an enhancement in the

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ecosystem, the bubble will eventually burst causing companies to shut due to lack of demand,
employees to become jobless and people again at a loss of options. To bring about a
sustainable growth, it is essential to.

1. Have a vehicle scrapper and depreciation law that encourages vehicle purchase cycle.

2. More attractive taxation per vehicle so the per unit price of vehicle goes down. In the
process, net tax collection still improves due to volume increase.

After changes in government policies, there were multiple new entrants in the automobile
industry of Pakistan, so in order to see the response on this of Big 3 of automobile industry of
Pakistan, in terms of financials and marketing strategies.

Moreover, Employee retention is not a factor anymore. This threatens the organization
culture. Since the monopolies have been destroyed by the new entrants. There is more choice
for employees to move around. Thus, switching has become easy from one automobile
company to another.

In terms of innovation, people used to go with limited brands and this meant that the industry
was not focused on R&D, which meant outdated technology. Now, the current trend has seen
an uptick in innovation and research which has caused Indus motors to focus on new
generation. It will be interesting to see how the organization plays this out.

IMC is looking to expand their operational capacity, which means more supply against
newfound demand. This is due to increased buying power and competition in the economy.
People are moving towards SUVs from Sedans.

The global auto industry is transforming. EV and self-driving cars are now here. However,
our infrastructure and technology R&D is unable to support this new ecosystem. Without this
ecosystem upgrade we will not be able to locally produce and deploy these advanced cars.

IMC was also chosen because this is a joint venture between Toyota Motor Japan. In the
internal operations of the company, Japanese are also involved, this means different learning
of new cultures.

Strategy Levels

Corporate Level Strategy

Corporate strategy of Indus Motor Company is to be an employer of choice and to be a

mobility company as per global guidelines of Toyota Motor Company (TMC) which has a

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direct interest in the business of IMC as it is a joint venture between IMC and TMC.
Corporate level strategy of IMC also signifies to be a leading contributor to Pakistan
economy. Having stated these strategies, IMC always strive to achieve the results aligned
with its corporate strategy. It can be seen in one of the recent examples, where IMC has
broken record of achieving highest ever production and sales in the history of IMC, which
eventually contributes in the economy in the form of high dividends to shareholders, high
profits, extra bonuses to employees and more tax contribution to the government, as it is a
public limited company.

Business Level Strategy

Business level strategy of IMC is to emerge as the # 1 mobility company in Pakistan by

securing # 1 share in segments, where the company operates in and to generate sustainable
business growth by securing total market share of 23% and volume targets of 64,000 units per
year, especially now when the new players are entering into the Pakistani market and the
competitive environment along with government auto policies are giving a tough time to the
old auto giants like Indus Motor Company.

Functional Level Strategy

Functional Level Strategy of IMC is the Hoshin, (Japanese: ‘Policy Management’) where the
functional objectives are being set and then communicated to put into action. For each
department, the Hoshin is being developed in line with the business level strategy so that the
corporate strategy can be achieved. For example, for marketing function in IMC, the
functional strategy is to make Yaris a #1 selling sedan in Pakistan in the overall sedan
category, for Corolla to secure C segment leadership in the C sedan segment. It also has a
strategy to strengthen Complete Built up (CBU) business. Other than this the focus is on the
brand enhancement transformation from just a car company to mobility company and to have
a wider network expansion.

SWOT Analysis of IMC

IMC’s Strength

IMC's strengths demonstrate that the firm is fit for keeping its situation as one of the top
vehicle producers on the world. This component of the SWOT examination model recognizes
the inside essential factors that fill in as capacities of the firm. IMC's fundamental qualities
are as per the following:

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 Good brand image

 Worldwide production network

 Quick advancement abilities

IMC's Weaknesses (Internal Strategic Factors)

IMC's Weakness highlight potential failures in the association. This component of the SWOT
examination model decides the interior key factors that fill in as impediments to business
development. IMC's primary shortcomings are as per the following:
 Progressive authoritative construction

 Mystery in hierarchical culture

 Impacts of item reviews as of late

IMC's worldwide various levelled authoritative construction forestalls most extreme

adaptability of provincial tasks. Likewise, the organization's way of life of mystery is a
shortcoming that lessens reaction times in tending to arising issues

Opportunities for IMC (External Strategic Factors)

IMC's opportunities are basically founded on innovative and monetary patterns. This
component of the SWOT examination model distinguishes the outside essential factors that
the firm could use to improve its business. IMC's most huge chances are as per the following:
 Developing business sectors in agricultural nations

 Rising interest for eco-friendly autos

 Developing interest in cutting edge hardware in vehicles

 Weak Japanese Yen versus U.S. Dollar

Creating markets present the chance for IMC to expand incomes by additional infiltrating
these business sectors. Additionally, the latest things of expanding request and interest for
higher eco-friendliness and progressed hardware present the chance for IMC to zero in its
advancement on these headings.

Threats Facing IMC (External Strategic Factors)

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The dangers to IMC's business depend predominantly on the cutthroat scene. This component
of the SWOT examination model decides the outer key factors that could diminish the
association's exhibition. For IMC's situation, the fundamental dangers are as per the
following:
 Developing business sector presence of ease contenders

 Quick development of contenders

IMC faces the danger of rivalry with ease autos from Korean, Chinese and Indian makers,
which have been expanding their essence in unfamiliar business sectors. [ CITATION
Fre17 \l 1033 ]

PESTEL Analysis of IMC

Political Factors Affecting IMC's Business

Coming up next are the huge political components in the distant or large-scale climate:
 Political steadiness in most significant business sectors (opportunity)

 International alliances (opportunity)

 Administrative help for ecofriendly items (opportunity)

The political factors of significant business sectors are a chance for IMC to develop with
insignificant political pressure. Additionally, international alliances including Japan and
different nations where IMC works present freedoms for improved market infiltration.
Furthermore, legislative help for ecofriendly items is a chance for the organization to improve
its items to fulfill or surpass ecological assumptions.

Economical Factors Important to IMC

For IMC's situation, the main financial outer components in the far off or large-scale climate
are as per the following:
 More vulnerable Yen versus U.S. Dollar (opportunity)

 Fast development of auto area in Pakistan (opportunity)

The fast development of creating economies present the chance for the firm to improve
incomes dependent on these business sectors. In this element of IMC's PESTEL/PESTLE

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examination, the principle financial outer variables set out open doors for business
development.

Social/Sociocultural Factors Influencing IMC's Business Environment

IMC encounters the impacts of social or sociocultural components, includes:

 Increasing interest in cross breed vehicles (opportunity)

 Increasing interest in electric vehicles (opportunity)

 Widening abundance hole (danger)

IMC has the chance to give more items that fulfill clients' expanding interest in half and half
and electric vehicles. Notwithstanding, the organization should consider the extending
abundance hole, which is a danger since it compares to a declining working class. The
working class is the primary income wellspring of IMC.

Technological Factors in IMC's Business

 Rising utilization of online business (opportunity)

 Mobile innovation pattern (opportunity)

IMC has the chance to upgrade its portable applications to expand client commitment and
dedication. Notwithstanding, the organization should address the danger of cybercrime,
including corporate digital surveillance.

Environmental Factors

IMC needs to remember natural worries for its essential dynamic, IMC Eco factors includes:
 Climate change (opportunity)

 Declining worldwide oil reserves (opportunity)

 Increasing accentuation on business maintainability (opportunity)

IMC has freedoms to give all the more harmless to the ecosystem items, like electric
vehicles or vehicles with higher eco-friendliness.

Legal Factors

Overall sets of laws IMC's business. For IMC's situation, coming up next are the main
legitimate outside factors in the far off or full-scale climate:

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 Improving protected innovation laws (opportunity)

 Increasingly intricate ecological laws (opportunity)

 Increasingly intricate customer laws (opportunity)

IMC has the chance to develop with diminished worries for encroachment of its licensed
innovation rights since governments are pursuing improving licensed innovation assurance.

Future Prospects of the IMC – External environment and Competitors

Consumers can make more informed buying choices than ever before, thanks to the growing
prevalence of e-commerce, social media, and review aggregators in recent years. This is
particularly true for big-ticket products like a new vehicle. Pakistan's oligopolistic car
industry has been described by overpriced, substandard automobiles. In the face of weak
local competition, the veteran auto trio of Atlas Honda, Indus Motors, and Pak Suzuki Motors
have enjoyed overwhelming market domination over the years. The stumbling sector was
never a priority for the authorities, which resulted in a lack of stimulus to attract newcomers
to the market. As a result, the people had to make do with inferior, watered-down
automobiles.

Building high-quality products is critical for automobile manufacturers like Indus Motor
Company, a leading manufacturer of Toyota vehicles headquartered in Pakistan, to cultivate a
good brand reputation, foster loyalty, and attract new consumers to purchase. Now that
legislation has been implemented to further stimulate Pakistan's automotive industry, a slew
of new international companies is joining the market. Increased competition is great for
domestic creativity and development, but it also brings with it new challenges.

Since Pakistan has made significant technical advancements, a lack of localization in the
automotive sector makes no sense. Aside from implementing protocols to shield the public
from shady businesses, moving to local manufacturing may be the catalyst for a
transformation in this industry.

Key Success Factors of Toyota Corporation

For implementing these key factors for the success of Toyota Industry possibly make the
leading position in the market are some of following mentioned below:

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Innovation:

Toyota Corporation implemented the new strategies and initiated to follow new ideas to
produce International Multipurpose Vehicle (IMV) aim to capture the overall world
manufacturing process and methods of supply.

Effective work execution:

To help in minimizing the industrial issues to make better relation with the mechanical
workers and train them to put their efficiency in work.

Market Share:

The market share has significance important in the industry, it implies that every person is
frequently patronizing their cars on the bases of quality control prices and the services and
administration.

Distribution channels:

It is the most significant factor in the automobile industry and as well as Toyota Corporation
because it is based on the industry sales by reason of that cars are not selling straight to the
consumers personally, Industries are totally depended to the distributors of cars or dealers for
showcasing the customers of their products.

Ideal Position of Utilization:

In modern automobile industry required for modern methods for success to requirement of
high plant application and light duty motor vehicle production plant.

Research and Development:

The main focus of Toyota Corporation is in the research and development department and
find out some important factors that durability, quality and reliability and foremost important
one is environmental base value focus which is necessity of hybrid production line and
initiated with the new and environmentally friendly products based on the new technological
factors. Furthermore, about popularity of the Toyota so its gasoline base electric cars
achieved highest demand in the market which is Lexus and scion are in highly demand
product based on their durability and quality.

Manufacturing Facilities:

The methodology strategy of JIT and lean production process facility has made the success of
the Toyota Corporation, they also assemble for the local markets of manufacturing of the

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automobile. They have largest production and manufacturing plants are founded in the global
areas.

Capable Workforce:

Toyota believe in the competitive advantages and wanted to achieve and stand lead position
in the market to implemented and follow these principles to set their goals and accomplished
it are Challenge, Genichi Genus (Go and See), Kaizen (Improvement), Teamwork and
Respect.

Conclusion and Recommendations

Indus Motor Company is a joint venture between Toyota Motor Corporation and Toyota
Tsusho Corporation of Japan. IMC has greatly contributed to the local automobile industry in
Pakistan and successfully managed to maintain its position as one of the leading automobile
manufacturing brands in the country. The business model of IMC constantly focuses on
satisfying its customers according to their demand for new products with a just in time
production services where vehicles are sold via 3S dealerships across the country. These
dealers of IMC are restricted to have an alliance with its competitors. Some of the prominent
alliances of IMC are Pak Suzuki & Honda Atlas Pvt. Ltd.

The long-term business strategy of IMC is to be recognized as the # 1 automobile company of

Pakistan by developing policies that are in lined with the local and international business
objectives of the company. With a great number of dealerships, innovation in products,
research and development, manufacturing facilities, capable workforce and other distribution
channels Indus Motor Company has successfully captured a massive market share in Pakistan
which includes both individuals & corporate buyers.

Despite of the position that IMC enjoys in Pakistan, the company should focus on its primary
weaknesses i.e., Progressive authoritative construction, Mystery in hierarchical culture and
Impacts of item reviews as of late. The company should bring innovation in the production
line by introducing affordable ecofriendly cars for the middle level buyers in Pakistan that
can fulfill the vision of Toyota to ‘Think Global and Act Local’.

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References

Majid, A., Raza, A., Rehman, Y., & Zafar, V. (2019). Factors Affecting Consumer's Purchase
Intention When Buying Toyota Corolla in Pakistan.

Ahmed, R. (2013). Business perspective brand tracking of Toyota Corolla case study for
Pakistan. International Journal of Asian Social Science, 3(4), 930-938.

Ferguson, E. (2017, Feb 2). Toyota’s SWOT Analysis & Recommendations. From Panmure
Institute: http://panmore.com/toyota-swot-analysis-recommendations

Richard, F. (2017, Feb 2). Toyota PESTEL/PESTLE Analysis & Recommendations. From
Panmore.com: http://panmore.com/toyota-pestel-pestle-analysis-recommendations

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