MARKETING PLAN FOR

TOYOTA COROLLA
MARKETING CONCEPT
Marketing is the process associated with promotion for sale of goods
or services. It is considered a "social and managerial process by
which individuals and groups obtain what they need and want through
creating and exchanging products and values with others." It is an
integrated process through which companies create value for
customers and build strong customer relationships in order to capture
value from customers in return.
Marketing is used to create the customer, to keep the customer and
to satisfy the customer. With the customer as the focus of its
activities, it can be concluded that marketing management is one of
the major components of business management. The evolution of
marketing was caused due to mature markets and overcapacities in
the last decades. Companies then shifted the focus from production
to the customer in order to stay profitable.
The term marketing concept holds that achieving organizational goals
depends on knowing the needs and wants of target markets and
delivering the desired satisfactions. It proposes that in order to satisfy
its organizational objectives, an organization should anticipate the
needs and wants of consumers and satisfy these more effectively
than competitors.

STRATEGIC PLANNING
Strategic planning is an organization's process of defining its strategy,
or direction, and making decisions on allocating its resources to
pursue this strategy, including its capital and people. Various
business analysis techniques can be used in strategic planning,
including SWOT analysis (Strengths, Weaknesses, Opportunities,
and Threats) PEST analysis (political, economic, social and
technological)

Strategic planning is the formal consideration of an organization's

future course. All strategic planning deals with at least one of three
key questions:
1. "What do we do?"
2. "For whom do we do it?"
3. "How do we excel?"
In many organizations, this is viewed as a process for determining
where an organization is going over the next year or more, typically 3
to 5 years, although some extend their vision to 20 years.
In order to determine where it is going, the organization needs to
know exactly where it stands, then determine where it wants to go
and how it will get there. The resulting document is called the
"strategic plan."
It is also true that strategic planning may be a tool for effectively
plotting the direction of a company; however, strategic planning itself
cannot foretell exactly how the market will evolve and what issues will
surface in the coming days in order to plan your organizational
strategy. Therefore, strategic innovation and tinkering with the
'strategic plan' have to be a cornerstone strategy for an organization
to survive the turbulent business climate.
DEVELOPING A VISION AND MISSION
Mission: Defines the fundamental purpose of an organization or an
enterprise, basically describing why it exists and what it does to
achieve its Vision. Mission may be long term as well as for short term
for any organization. A corporate mission can last for many years, or
for the life of the organization or may change as per the demand of
the organization mission varies. It is an objective with a timeline, but
rather the overall goal that is accomplished over the years as
objectives are achieved that are aligned with the corporate mission.
Vision: Defines the desired or intended future state of an organization
or enterprise in terms of its fundamental objective and/or strategic
direction. Vision is a long term planning, sometimes describing a view
of how the organization would like the world in which it operates to
be. For example a charity working with the poor might have a vision
statement which read "A world without poverty"
2

MARKETING PLANING
A marketing plan is a written document that details the necessary
actions to achieve one or more marketing objectives. It can be for a
product or service, a brand, or a product line. Marketing plans cover
between one and five years. A marketing plan may be part of an
overall business plan. Solid marketing strategy is the foundation of a
well-written marketing plan. While a marketing plan contains a list of
actions, a marketing plan without a sound strategic foundation is of
little use.
THE MARKETING PLANNING PROCESS
In most organizations, "strategic planning" is an annual process,
typically covering just the year ahead. Occasionally, a few
organizations may look at a practical plan which stretches three or
more years ahead.
To be most effective, the plan has to be formalized, usually in written
form, as a formal "marketing plan." The essence of the process is that
it moves from the general to the specific; from the overall objectives
of the organization down to the individual action plan for a part of one
marketing program. It is also an interactive process, so that the draft
output of each stage is checked to see what impact it has on the
earlier stages and is then amended accordingly.
The marketing planning process can thus be elaborated in just a few
points which will cover each and every important aspect of the market
that can be beneficial for an effective marketing plan. These steps
can be elaborated as:
1. Review of the marketing environment. A study of the
organization's markets, customers, competitors and the overall
economic, political, cultural and technical environment; covering
developing trends, as well as the current situation.
2. Review of the detailed marketing activity. A study of the
company's marketing mix; in terms of the 7 Ps.
3. Review of the marketing system. A study of the marketing
organization, marketing research systems and the current
marketing objectives and strategies. The last of these is too
frequently ignored. The marketing system itself needs to be
3

regularly questioned, because the validity of the whole

marketing plan is reliant upon the accuracy of the input from
this system, and `garbage in, garbage out' applies with a
vengeance.

MARKET SITUATION
Current Market Situation
(i)

REGIONAL MARKETS:
The auto market is one of the largest segments in world trade. The
annual size of automotive export trade in the world has grown to a
massive level of over US$ 600 billion, this account for about 10 per
cent of the world export. Changing models, improving fuel efficiency,
cutting costs and enhancing user comfort without compromising
quality are the most important challenges of the auto industry in a fast
globalizing world. Hence there is a need for exploring the industrial
complementarities in the region for better quality, favorable costs, fuel
efficiency and attractive designs. Therefore, the requirement of
information exchange in the region is much more pronounced now
than ever before for keeping the auto industry afloat and competitive.
The objective should not be only to understand each others
comparative advantage but also to explore mutual complementarities
as well as to build an early warning system on the trends in industry
and changes in user preference to brace for the challenges
confronting the auto industry. Mutual consultation among the
countries of the region therefore assumes the proportion of an
abiding imperative for regional capacity-building and preparing the
countries to meet the requirements of the new economy through
research, advisory services, information dissemination and exchange
4

of country experiences, besides joint ventures and technology tieups.

Pakistans automobile sector is surely better off than many other
Asian neighbors including Sri Lanka, Nepal, Bhutan and Bangladesh.
Its high time that local manufacturers and assemblers should
penetrate into the world market. Signing free trade agreements with
these countries is surely beneficial for the local automobile industry.
However, franchises cannot export so policies should be formulated
and strategies designed to enhance infrastructural development and
promote innovation by local investors by offering duty free capital
investment as well as ample amount of financial assistance. To
become a part of world supply chain a culture of progression should
be promulgated and investment should be done at both technological
level as well as labor level.

(ii) PAKISTAN AUTO INDUSTRY:

Among the active players of the large scale manufacturing sector,
probably the automobile comes on the top of the list in view of multidimensional impact on socio-economic as well as trade relations with
the countries taking extra interest in the backdrop of a huge untapped
market as only 8 persons out of 1000 have a car in Pakistan.
Automobile sector is one of the fastest growing sectors in Pakistan. It
contributes towards the nations 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 2007-08.
Pakistani market has lesser penetration for cars. Eight in every one
thousand in the country have the cars. The same figure is 10, 12 and
21 in every one thousand in India, China and Indonesia respectively.
This is also a fact that from 1993 to 2004 the car industry was
working below capacity as the car market had been staying below
50,000 units per annum. In the year 2005-06 the industry produced
49,656 units against its installed capacity of 108,000 units per year.
The total car production stood at 120,000 units in 2007-08 compared
to 80,000 units in the previous financial year. This indicates that the
5

response was very quick. The car industry is on the track and it is
poised to produce a more than 215,000 units this fiscal.
The existing population of automotive vehicles in Pakistan is 3.9
million. The annual demand is estimated at 300,000, two thirds of
which is being met from local sources and imports and the remaining
one third is left unmet. The market value of automotive vehicles in
dollar terms is estimated at more than 1 billion, out of which import
constitutes around US$ 200 million. The after market of auto parts is
estimated at US$ 500 million, imports and local production taken
together.
Notwithstanding a manifold increase in car production in Pakistan
during the last few years, Pakistan still stands relatively low in terms
of motorization when compared globally and even to its neighbors.
The automakers need to take into account, as the demand is lot
greater then the supply.
Since 2005-06 the automobile market is growing rapidly by over 40
percent per annum and if an average annual growth of 30 percent per
annum is maintained, Pakistans market will cross the milestone of
500,000 units by the year 2010. Long-term investment friendly
policies of the government and up-gradation of production facilities
are considered as pre-requisite by experts for achieving the
automobile vision 2010 of 500, 000 units. Major automobile
companies in Pakistan have set up as joint ventures with foreign
multinational companies, thus encouraging the inflows of FDI in
Pakistan.
The automobile sector of Pakistan has shown significant growth in
the last couple of years. Sales performance of different segments is
given below. Production of cars in first nine months of 2007-08
increased from 87,104 to 112,478 units. Another 16, 885 different
types of vehicles were imported during July-Feb, FY06 under transfer
of residence, baggage and gift schemes as compared to only 5,177
units in the same period last year, showing an increase of 230
percent.
So far, Pak Suzuki, Honda Atlas and Indus Motor have been
dominating the market, emergence of competition was experienced
by the entrance of Dewan Farooque, Daihatsu and Hyundai Motors in
6

the market with a number of new product lines. This intense

competition has totally changed the paradigm of Auto Industry in
Pakistan. Pak Suzuki has been a sole market leader in assembling
800cc and 1000cc small passenger cars as well as 1000cc jeeps,
Potohar. In 1993, Toyota started its operation and in the proceeding
year 1994 Honda Atlas has commenced its operation in Pakistan as
the main competitors in 1300-2000cc segment but the Suzuki has an
edge over the market with 1300cc (Margalla) Baleno.
Automobile market has become more competitive in recent years as
new players are going to introduce their products in the market like
Daihatsu has launched its 850cc Daihatsu Coure, Dewan Farooque
has launched its Kia classic 1300cc and Hyundai Santro Plus 1000cc
car. There are a number of new products like Kia Shuma 15001800cc car by Dewan Farooque Motors.
The sudden competition in small car segment is expected to pose
challenge for Pak Suzuki, the former lone player in the market and
other leading name in the market. In near future, Dewan Farooque
will offer the widest range of products in the domestic automobile
market. The trend of localization is experienced at large in the
industry. Toyota is also following the trend of localization with 3o per
cent on its all models of 1300-2000 cc Corolla.
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.
Despite ongoing import of cars units from other countries and
increase in the production of cars in the country, the demand of cars
in market is increasing day by day. The production of cars has
registered a staggering increase of 127738 units as compared to last
years figure of 100213 (27.5%).

Product Situation
Toyota Corolla is the market leader in its class. Toyota Corolla is
manufactured both in Diesel and Petrol engines i.e. 2000cc diesel
and 1300cc and 1600cc petrol versions. Its main attributes are:
Competitive pricing.
7

High reliability.
Easy availability of spare-parts.
High goodwill.
Aggressive styling.
After sales services.
Swift distribution channels.
High resale value.
Decent safety features.
Toyota Corolla is the market leader in the 1300cc and higher
engines.
In an effort to appeal more to the Young at Heart people, the New
Corolla is aimed at offering the Pakistani Customer with World-size
Wheelbase and Height to achieve more interior space, luxury and a
sporty
look.
We
call
it
NCV."NewCenturyVehicle.
Cool, Sleek styling and bigger dimensions for an improved sense of
luxury. Many things in our life get bigger as society and the
environment change, or smaller as technology advances. Toyota
Engineers designed the Corolla by setting aside conventional ideas
such as, "This class of car must be this size". Making the Corolla
bigger was a natural consequence of today's trends.
Capturing Tomorrow's Values: Comfort and Luxury. Toyota
Engineers reviewed every possible angle to ensure total luxury: from
the concept of interior space to how the quality and texture of
materials appeal to the eye and to the touch. Today's users are not
wiling to be satisfied with the status quo. We are determined to offer a
level of comfort that goes beyond even what the users seek.

Integrating today's leading-edge technology. Society and specially

the car's role are definitely changing, as seen in cars attaining higher
performance. At Toyota, we integrated today's leading edge
technology to reflect those changes.
Indus Motors sales during FY06 stood at 40,961 units, portraying 17
per cent upsurge compared to 34,983 units last year. The companys
Toyota Corolla sales depicted 33 per cent increment to 30,527 units
with market share at 46 per cent in the 1300cc and higher engine
cars. Toyota Corolla is considered to be the most successful car in
Pakistan.
Products specification includes:
Basic

Corolla Sedan
1.3L
XLi

1.8L
1.3L 1.8L Manual
Automatic
GLi Transmission
Transmission

Exterior- L x
W X H (mm)
Exterior- L x
W x H (mm)
Wheelbase
(mm)
Minimum
Turning
Radius
Engine Type
2NZ-FE
Engine
Displacement
1299
(cc)
Fuel System
EFI
Max.Output
60K KW @
(SAE-NET)
6000 rpm
Max.Torque
119 Nm
(SAE-NET)
@4400 rpm
Transmission
5 M/T
ECT Switch
X
X
Brakes
Ventilated
(FR/RR)
Disc/Disc

2.0D
Saloon

2.0D

4530 x 1705 x 1480

1915 x 1430 x 1230
2600
4.9 m
1 ZZ-FE

2C

1794

1975

VVTi

Fuel Injection

100kw@6000 rpm

53 kw @4600 rpm

171 Nm @4200 rpm

131 Nm@ 2800rpm

5 M/T
4 A/T W / OD
5 M/T
X
0
X
X
ABS with Brake Assist
Ventilated ABS with
Disc/Disc
Brake

Assist
Suspension Leading Arm, McPherson Strut Coil Spring/ETA Torsion Beam,
(FR/RR)
McPherson Strut Coil Spring
Stabilizer Bar
Front/Rear
Steering
Power
System
175/70
Tires
175/70 R14
185/65 R14
185/65 R14
R14
Fuel Cut
X
X
0
0
X
0
System
Exterior
Antenna
Bumpers
Front Head
Lamps
Rear Lamps

LED (Light Emitting Diode) Type

Door Mirrors Manual

Power (Colored)

Door Sash
Black

Glass Embedded Print Antenna

Coloured
4 Lamp Multi-reflector

Manual

Power
(Colored)

VarIntermittent
0

Black

Colored
(RR only)

Black

Chrome

0 (Colored)
full
Steel

0 (Colored)

Front Wipers Intermittent

Var-Intermittent

Fog Lamps
Highmounted Stop
Lamp
Laminated/
tinted
Windscreen
Mud Flaps
(FR/RR)
RR Garnish
Side Impact
Bars
Side
Protection
Molding
Side skirts
Wheel Caps
Wheel Rim

Black

Colored (RR only)

Intermittent

Colored
0

Black

0
Chrome

Interior
Air
Conditioner
Cassette

0
0

10

Player
W/AM/FM
Radio
(Remote
Control)
Central Door
Locking
Digital Clock
Digital Trip
Meter
Door Trim
Foot Rest
Heater
Key
Reminder
Warning
Leather Gear
Shift Knob
Light on
Warning
Optitron
Meter
Power
Windows
Reverse
Gear Warning
RR Seat Arm
Rest (Center)
RR Console
Box
RR Head
Rest
Roof Lining
Seat Belt
(FR)

Seat Belt
(RR)

Seat Material
Shift Position
Indicator

(with Mp3
CD Player)

(with Mp3 CD Player)

0
0

0
0

Semi Fabric
0
0

0
0

0
0

0
0

W/Lid W/Lid

0 (with Cup Holder)

W/2 Level Lid (F)

W/Lid

0
(with Cup
Holder)
W/2 Level
Lid (F)

Adjustable
Molded
3 Point ELR x 2 (W / Adjustable Anchorage)

3
point
ELR
x 2,
Lap
Type
x1

3 Point ELR x 2,
Lap Type x 1

3 Point
ELR x 2 ,
Lap Type
x1

Fabric
X

11

Speaker
SRS Air Bag
(Drive)
Steering
Wheel
Sun visor
Tachometer
Tilt Steering
Trunk Lamp
Wood Grain
Finish
Wood Grain
Finish on Arm
Rest

3 Spoke

6
0
0 (Electronic)
0
(Electronic)
4 Spoke
4 Spoke Leather
3 Spoke
Leather
D + P W/Mirror and Card Holder
0
0
X
0
0
0
0
0
0
0
0
0

0
0
0

0
0
0

PERFORMANCE
VVT-I (Variable Valve Timing - intelligent)
The powerful 1.8 liter VVT-i engine offers smooth and seamless
delivery of power, thanks to optimal timing achieved by using Toyota's
proprietary VVT-i (Variable Valve Timing - intelligent) technology
Delivers powerful torque through low-to-medium engine rpms
by optimizing valve timing
Provides smooth acceleration
Enhances fuel economy and reduces emissions
ECT - Electronically Controlled Transmission
The new Altis 1.8 VVT-i comes equipped with an electronically
Controlled Transmission Switch that allows you to choose the kind of
driving experience you want to enjoy. You can choose between
normal and power driving modes. The normal drive results in
economic fuel consumption while driving on busy roads in the city,

12

whereas, the power drive extends the interval of automatic gear shifts
for optimal speed.
SAFETY
Anti-lock Breaking System (ABS) with BRAKE ASSIST ABS (Anti-lock
Braking System) prevents wheel lock-up when braking hard or on
slippery roads. This allows the driver to steer around obstacles and
ensures stability.
GOA BODY STRUCTURE
Highest level of safety body, conforming to Global Outstanding
Assessment body standards provides a crushable zone specifically
designed to dispense impact energy through the rest of the structure,
while keeping the reinforcement cabin intact, protecting passengers.

PRICES
MODEL

PRICE

Corolla Xli, 1.3L

Corolla Gli, 1.3L
Corolla 2.0D
Corolla 2.0D Saloon
Corolla Altis M/T 1.8L
Corolla Altis A/T 1.8L(Sun Roof)

(PKR)
1,269,000
1,384,000
1,317,000
1,754,000
1,754,000
1,839,000

Competitors Situation
SUZUKI MOTORS:
Suzuki is the leading name in small commercial vehicles and
passenger cars. Suzuki commenced its operation by assembling
13

small 800 cc cars. Suzuki has been so far a sole leader in 800cc and
1000cc passenger cars as well as 1000cc jeep Potohar. But the
emergence of so many competitors in the market will definitely trigger
a very hard time to Pak Suzuki. Suzuki has launched Mehran 800cc,
Cultus 1000cc, Baleno 1.3 & 1.6 Eli and Gxi, Bolan van & Ravi pickup
800cc and Potohar jeep.
Pak Suzukis sales during FY08 portrayed 31 per cent upsurge. Sales
figures of Pak Suzuki Motors during FY08 posted sanguine growth at
31 per cent to 99,104 units compared to 75,720 units during FY07.
On MoM(month to month) basis, sales figures increased by 3.9 per
cent to 11,247 units during June compared to 10,824 units in May
2006. Pak Suzuki is the market leader in the 1000cc and lower
segment of cars with sales of Suzuki Mehran, Suzuki Alto and
Suzuki Cultus at 35,982 units, 16,823 units and 21,390 units
respectively. The company has replaced Suzuki Baleno with Suzuki
Liana during the period and the product is getting acceptance in the
market. Sales figures of Suzuki Liana remained on the ascending
trend with 1,535 units during June compared to 1,187 units in May.
Honda:
Honda started its operation in Pakistan in 1994. Honda is enjoying its
key position in the segment of 1300 cc and above. Honda has
launched many models like Civic 1.5 cc, City 1.3 cc to 1.5 cc etc. VTI
brand continued to be popular among customers.
During FY08, Honda Atlas Cars sales soared by 17 per cent to
28,134 units as against 24,066 units previously. Currently, Honda
Atlas assembles only two vehicles namely Honda Civic and Honda
City to tap the upper-end segment of car market. On MoM basis,
Honda City sales stood at 1,229 units in June, almost double
compared to 626 units during the preceding month. Demand of
Honda Civic declined by 61 per cent to 341 units MoM.
Dewan Farooque Motors:
It is the major competitor which has commenced its operation with a
wide range of products in domestic automobile market. Dewan
Motors is basically collaboration with Hyundai and Kia, two Korean
auto manufacturers. The initial response to Dewan's offering in the
market with record company booking of its Santro Plus. It has
14

launched its Kia classic 1300 cc car with sophisticated features. In

future wide range of models like Kia Shuma 1500-1800cc car, Kia
Sportage 2000 cc sports utility are expected to launch in the market.
Dewan has also launched its 1.5 tons Shehzore, the assembly of
Hyundai light commercial vehicle has already started at the Sindh
Engineering Plant in Karachi under contractual agreement.
Dewan's presence in the market will give the major move to the auto
industry in Pakistan. The intense competition will give the benefit to
the potential buyer in the market.
Automobile sales figures of Dewan Farooque Motors has remained
stable on the back of increased demand of Hyundai Shahzore, which
is considered to be the most competitive vehicle in the LCV segment.
During FY08, Hyundai Shahzores sales stood at 9,234 units, 15 per
cent higher compared to 8,012 units previously. On the other hand,
Hyundai Santros sales remained almost intact at 7,031 units during
FY08 as against 7,009 units last year due to intense competition from
small imported cars.
Daihatsu:
Daihatsu, another new player in the market with its Cuore 850 cc,
increased the competition in the market . Daihatsu and Indus Motor
signed an agreement to launch the Coure in market. The project
worth Rs 750 million was developed at Port Qasim between Daihatsu
and Indus Motor to produce Coure. Daihatsu also heated up the
competition in small car segments.
Suzuki for the first time faces competition in small car business. It is
for the first time that Daihatsu will produce its car in Toyota Plant in
Karachi. The assembly plant of Daihatsu has the capacity to produce
10,000 Cuore cars in the year. But the expected level of output in
future will be some about 5000 cars in the starting year of its
operation.

Distribution Situation
Toyota's corporate philosophy revolves around customer satisfaction,
which is symbolized in the 3S Concept. Toyota is the Pioneer in the

15

3S System, which offers Sales, Service and Spare Parts all from the
same facility.
Indus Motor Company is privileged to have the most modern Service
Network in the country. All our Toyota and Daihatsu Dealers operate
on "3S" basis (Sales, Service, and Spare Parts). Customer
Satisfaction is the cornerstone of our Marketing philosophy. Modern
equipment and facilities exist at each dealership that is named by
professionally trained Service Technicians.
The Service network under-went recent expansion and comprises of
25 Dealerships in 14 cities. Our Service network has over 750 stalls
where catering to General Jobs, Car Wash, and Body Paint Jobs are
undertaken.
IMC's dealerships are equipped with Toyota and Daihatsu special
Service Tools (SSTs), modern state-of-the-art computerized auto
servicing and diagnostic equipment. The repair jobs are under taken
by trained and qualified staff. Service staff training and development
are always a priority at Indus Motors .
IMC '3S' Dealers are in the following cities:

Karachi (7), Quetta (1), Multan (2), Lahore (6), Faisalabad (1),
Sargodha (1), Mirpur AK (1), Rawalpindi (1), Islamabad (2), DI Khan
(1), Peshawar (1), Mardan (1), 25 Dealers in 14 Cities.

Specialized Equipment with dealers:

Engine Analyzers
Computerized 4 wheel alignment equipment

Paint Booths

Special Service Tools

2 Post Auto Lifts
Wheel Balancer

16

 Frame Aligner (some dealers)

Wide Range of Garage Equipment
Body Repairing Equipment
Electrical Service Equipment
Other computerized Equipment and Testers
IMC and its service Department undertaken extensive training of its
dealer' service staff by conducting over 30 specialized course a year
for service managers/service advisors, service Engineers and
Technicians. Over 200 man-days are devoted each year to Service
Training.

Macro Environment Situation

STABLE political conditions, improved international standing and
robust economic growth in the country have really changed the
market dynamics during the past some years. Pakistan has become
one of the leading countries in the developing world to register a GDP
growth of over 6.5 percent for the last two consecutive financial
years.
With changes in the market dynamics, the demand for certain
industrial goods has increased and almost the same happened in the
demand for passenger cars.
A fast emerging middle income group on the back of growing
noticeable economic growth in the region, huge investment in auto
sector is a natural come especially Pakistan is the country which
offers highest rate of return in this region.
Generally speaking, the minimum rate of return on investment in
Pakistan is 15 percent while it shoots up geometrically in many
cases. As against that the average rate of return or profit earnings in
neighboring India, China, Singapore, Thailand etc hardly oscillates
between 3-5 percent, whether it is automobile, pharmaceutical or for
that matter investment in the stock exchange business.

17

As a result of this attractive rate of return, loopholes in the system,

ever growing demand, and the investors in the automobile sector
have brought in huge investment by almost doubling the volume of
production.
The major factors that really revolutionized the market are the
introduction of bank leasing and financing at a larger scale than
imagined. Flushed with liquidity, the banks also enhanced their credit
disbursement to the private sector at very low mark up rate. Similarly,
the economic condition of the people has improved to some extent
and they also went for buying cars. There was also a surge in
remittances of expatriate Pakistanis since 2001. With these
developments the passenger cars demand has increased thus
resulting in a gap between supply and demand. This problem has
perturbed a large segment of society. However, the prime victim of
this episode is itself the car industry of Pakistan. There has been
consistent criticism of the car manufacturers at every possible level
despite the fact that this increase in demand is actually offering a
unique opportunity for them to penetrate in the market.
Instead facilitating the car industry, the government went on a
rampage and it allowed the used cars imports with liberal
depreciation allowance and easy conditions in the Trade Policy 200506. The government says that the import of used cars has been
facilitated only for the overseas Pakistanis. But the fact remains
otherwise if properly analyzed. Numbers of auto dealers are openly
trading imported used cars and in some cases massive under
invoicing is resorted to.
The capacity expansion plans drawn by the local automobile industry
involving a huge investment worth Rs150 billion during 2006 is feared
to receive a severe jolt by the permission given to the overseas
Pakistanis to import used cars in Pakistan.
During July 2005 until May 2006, 34,723 vehicles have entered
Pakistan, which indicates a 225% rise as compared to the previous
fiscal year in which only 19,658 vehicles were imported. This
alarming trend is setting off warning signals for the local automakers
who were disheartened by the budget and the governments
allowance in facilitating a new tax regime for the new admissions in
the auto sector.
18

The local auto industry sees the new budget as a move by the
government in discouraging the local car makers as the new policies
will lead them to eventually scrap their capacity enhancement plans.
These figures reveal that the import of cars facilitated not the middle
class but the elite segment of society.
This small majority who prefer the cars are not concerned about the
cost or the availability of the spare parts in the local market. The local
auto sector has repeatedly reminded the government that the
facilities which are being offered under various schemes are
continuously being violated by dealers and non- genuine buyers who
sell these used cars which are in reality imported by overseas
Pakistanis and are in fact breaking the law as these vehicles are only
to be used by members of family.
The government has allowed the overseas Pakistanis to import the
cars. But there is no mechanism in place to ensure that only this
segment of Pakistanis is actually importing the cars. The government
claims in this regard seem baseless because the unregistered car
dealers largely misuse this facility.
Here one must know that import is done of some vehicles, which are
not suitable for the roads of Pakistan. They are also not fit as far as
the fuel specification generally being observed in the country. Most of
expatriates are exploited by the used car dealers as service and back
up facility remain unavailable in the market.
On the other hand this could give really a very serious blow to the
local industrys growth prospects in the long run. Over 400,000
people are employed by the car industry. Their employment could be
at risk due to import of used cars which offers no employment. Unlike
the imports, with the local manufacturing the technology is also
transferred.
The significant aspect of this episode is that the import of used cars is
contributing much to the rising trade deficit, which has touched an
alarming level in the current financial year. The used car import is
capital intensive business. The local manufacturing leads the country
self-reliance and other option will leave the country dependent on
foreign sources.
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Automobile development is a fusion of more than seven hundred

technologies and thereof its an extensive and multifaceted process.
Where nations like Germany have been consistently trying since
1800 or so they are reaping the benefits at this point in time. India too
has locally manufactured vehicle under the brand name of Maruti.
Indian government fully supports locally made cars and this is
portrayed by the usage of locally manufactured cars by their own
governmental officials. As for Pakistan several prototypes have been
built lately but government has not been very supportive.
University level education in Pakistan is not up to the mark. There is
no specific engineering branch for automobile engineering or
production engineering. At present the industry requires innovative
thinking professionals and entrepreneurs. Good professionals arent
available owing to the brain drain, and those present are very few in
number to meet the market demand.
Pakistan lacks research and development facilities therefore local
manufacturers can only copy and not tailor-make when developing an
automobile. Unlike the west Pakistans a third world country where
fuel is as expensive as Rs57 per liter hence development of an
underpowered, fuel efficient car is required. This would not only
require lesser fuel intake but will also be comparatively cheaper.
Governments investment policies
The Government has liberalized the investment policy environment
for domestic as well as foreign private investment in the industrial
sector. There is no upper limit on foreign equity and foreign
ownership of industrial projects. There is also no restriction on
remittance of profit, dividends, payment of royalty and technical fee.
The Government is also encouraging joint ventures, technology tieups, co-manufacturing and co-exporting arrangements with foreign
investors. Even relocation of projects is being encouraged in view of
the transformation of developed economies into hi-tech areas. Major
advantages for investment in Pakistan are as follows:
Abundant land and natural resources
Vast human resources
Growing domestic market
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 Well established infrastructure

Strategic geographical location

Fundamental problems in the automotive sector are as follows:

Low volumes / under utilization of capacity
High prices
Slow transfer of technology
Pakistans investment space is vast. Imperatives of the investment
continuum e.g. economic interest of the country and the financial
interest of the individual investors are the key considerations. There
is a kind of an organic link between the national economic interest on
the one hand and the individuals financial interest on the other.
Sustainability of this linkage is the key to a win-win situation. This is
being achieved by completely freeing the Government from the
upfront controls and regulatory overhang which it had instituted on
investment over the years. Trade and industry is no more being
controlled by the Government. The private sector is now in the
drivers seat. The Government is trying to put it on the high road of
development. Approach is fast-track. The policy focus is shifting to
the provision of the following requirements; namely:

Adequate policy framework

Simplified operating procedures
Strong support mechanisms
Easy access to capital
Upgrading technologies
Enhanced productivity
Reliable quality control
Enhanced management skills

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 Well-trained manpower
Improved marketing skills.
Thus a reliable investment environment is being developed. The
strategic preference is massive change instead of marginal one.
Value-addition is our national priority for increasing national wealth.
This requires upgrading of technology and capacity-building in design
development for improving our position on the value chain. There is
therefore an immense scope of cooperation and technology tie-ups
for cost-effective co-manufacturing of automotive vehicles in Pakistan
for domestic and export requirements. The Asian and Pacific regions
support to Pakistans volume-starved automotive sector and nascent
vendor industry manufacturing auto parts for OEM and export
markets is therefore a felt need of Pakistan.

SWOT ANALYSIS
Strengths
Competitive pricing.
High market share.
High durability.
Easy availability of spare parts.
Aerodynamic body shape.
Elegant body features.
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Comfortable ride.
Luxurious car interior.
High goodwill.
Prestigious car history.
Good resale value.
Swift distribution channels.
Updated safety features (Air-bags, seat-belts, ABS braking,
Safety beams etc.)
Low fuel consumption
As production of vehicle is based on foreign joint ventures of
Japanese origin, the product quality is of international standard.

Weaknesses
People often criticize the breaking of the car although that
braking system of the car has been updated to ABS but still the
body rolls when the brakes are applied at high speed.
The cheesy of the car is not stable while doing high-speed
sharp turns.
The body of the car is too heavy.
The rims and tires of the car are not impressive.
The cars steering is a bit light and the driver cannot feel the
road.

Opportunities

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Making a sporty version of the car just like the CIVIC TYPE-R,
this is the faster racing version of HONDA CIVIC having 200bhp
and a sports body frame.
Extra market can be captured by introducing Company fitted
CNG Kitts in the car.

Threats
Swift competition from other manufacturers mainly Japanese
and Korean car-makers.
High oil prices resulting in decrease in demand of fuel thirsty
sedans. But the fuel Consumption of Toyota Corolla is fairly
decent.
Global inflation due to increase in population and high oil prices
may result in decrease in demand of sedans.
Increase in demand of other cars may result in downward trend
of the brands goodwill.
Lower prices of Korean car manufacturers may be a threat in
the future. But presently Korean cars are not making a big impact
in the market because of reliability and resale problems.
Currently Pak Suzuki is posing a threat as Pak Suzuki is
producing cheap cars and is targeting the lower-middle and
middle income group consumers.
Permission given by the Government to the overseas
Pakistanis to import used cars in Pakistan.

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Issue analysis
Main issues concerning the Toyota Corolla are:
a) Should it develop a Sports version of the car, like in the case of
Honda making CIVIC TYPE-R to complement Honda CIVIC?
b) Should company fitted CNG kits be introduced in the cars?
c) Should it increase its prices?

OBJECTIVES
To obtain the production target of 29,000 units (current: 25,100)
by the end of year.
To increase market share from 25% to 29%.
To achieve internal growth rate of 50%.
To increase brand awareness among consumers target market.
To earn rate of return on investment (ROI) of 10%.
Produce net profit of 2.14 billion with a target net profit margin
of 6%.
To increase sales volume from current 24,344 units to about
27,000 units annually.

MARKETING STRATEGY
Product Development:
Alloy rims should be introduced in all the versions of Corolla
so as to contribute to smooth braking, stability, comfort &
vibrant look of the car.
Speedometer panels should be developed into digital units
to compete with new Honda Civic.
Accessories like Traction Control should be introduced in the
car so as to improve its traction on rainy and snowy
surfaces. It will also enhance high speed cornering stability.
This new product feature will attract extra customers in the
Pakistani market.
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 Electronic Sunroof should be etched in the Saloon versions

(2.0D Saloon and 1.8 VVT-i) as it is in Honda Civic.
Concentric Diversification Strategy:
As Corolla is the market leader in manufacturing Sedans and is
enjoying wide customer base and high good will, it should take
advantage of the present situation and develop a Sports version of
Corolla because of the following reasons:
To compete with the Civic Type-R, this is the sport version of
Honda Civic.
To increase its customer base.
To increase its sales revenue.
Pricing Strategy:
The prices of the present Corolla should be reassessed for the 1.8
Corolla Altis VVT-i (Manual and automatic) units which are the front
line competitors to the new Honda Civic 2006.
The prices for the above model should be increased up to a minimum
of Rs. 30,000 because of the following reasons:
The new Honda Civic is charging from Rs. 1.32 million to 1.5
million, whereas Corolla being the market leader is charging
from Rs. 1.22 million to 1.31 million ( Corolla Altis M/T 1.8L
and Corolla Altis A/T 1.8L) respectively.
As the demand for Toyota Corolla is considerably more than the
supply, thus, an increase in prices will not harm the current
demand.
Due to double-digit growth in inflation and subsequent increase
in production costs.

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ACTION PROGRAMS
To increase its sales revenue and to achieve the production target of
52,000 units by the end of the year, the company should take the
following steps:
a) It should expand its present production plant capacity so as to
meet the required target.
b) The company should hire trained manpower so as to meet the
requirements.
c) The company should expand its distribution channel.
For the Sport version of Corolla, the company should establish a
separate division and should be assigned the task of developing the
new Sports prototype with a span of one year. For this, Toyota should
acquire technical assistance like engineers and mechanics from
abroad.
After the development of the prototype, it should be tested thoroughly
in all respects. The new product should be launched during the first
quarter of 2009 with an aggressive marketing strategy.

Controls/Feedback
The goals and objectives that are set out and the targets mentioned
in Projected Financial Statements should be evaluated at every
stage. Necessary corrective measures should be taken if any
deviation is found from the predetermined benchmarks.
Promotional expenditures allocated should be properly utilized and
the subsequent results of the advertising campaigns should be
evaluated from time to time.

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Strategies implemented should be assessed and necessary changes

should be made according to the changes in internal and external
environmental factors.

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