Project Report Symbiosis Centre For Management Studies

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A COMPARATIVE STUDY
ON THE EFFECT OF MARKETING TECHNIQUES OF
VOLKSWAGEN & TOYOTA
A Project Report Submitted in
Partial Fulfilment of the Requirement for the Degree in
Bachelors of Business Administration
By
Pranshu Sahni
3032
TY-A
08020621181
February 2011
Symbiosis Centre for Management Studies (UG)
Symbiosis International University Pune
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Acknowledgments
The concepts learnt in academics are of no importance until they are
practically applied. In today¶s world it is imperative for the students of any
Under- Graduate course to keep pace with the changing technology
innovations taking place across the world. In alignment with this, I
prepared a Research Project Report after my 5th semester of BBA.
I am heartily thankful to my Project Guide, Mrs. Ahuti Mishra whose encouragement,
guidance and support from the initial to the final level enabled me to develop an
understanding of the subject. I express my thanks to the Director of Symbiosis Centre
for
Management Studies for allowing me to work on this project.
I wish to express my deep sense of gratitude to the Sales Managers of both
Volkswagen and
Toyota for their support and guidance. I would also thank my Institution and my faculty
members without whom this project would have been a distant reality. I also extend my
heartfelt thanks to my family and well wishers.
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CERTIFICATE
This to certify that the Research work incorporated in the report
----------------------------------------------------------------------------------------------------------------
is a bonafide work done by Mr. / Ms.---------------------------------------------------------.
It was carried out by the candidate under my guidance and supervision. The materials
from
other sources have been duly acknowledged by him / her in the research report. This
work is
submitted in partial fulfilment of the requirement for the degree Bachelor of Business
Administration in the academic year 2010-2011.
Dr. Anupama Suresh
Director, SCMS (UG) Project Guide
Place:
Date:
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STUDENT̉S UNDERTAKING
I Mr. / Ms.______________________________________hereby certify that the
Research
work incorporated in the report
_____________________________________________________
__________________________is a bonafide work done by me. The materials from
other
sources have been duly acknowledged by me in my research report. This work is
submitted in
partial fulfilment of the requirement for the degree Bachelor of Business Administration
in
the academic year 2010-2011.
Signature : __________________________________
Name of the student: __________________________________
Division : __________________________________
Exam Seat No. :___________________________________
Date : __________________________________
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Abstract
The Indian Automobile Industry is on overdrive. The rapid urbanization, coupled with an
overwhelming growth in the middle class population, has created an Indian market that
is
extremely conducive for the automobile industry to flourish. Indian automobile industry
recorded a growth of 16.07% in 2006-2007.Automobile industry contributes 4% of the
national GDP and accounts for 5% of the industrial output in India. It is moreover, a
major
employment generator in the country. The Indian automobile industry provides
employment
to around 13 million people directly or indirectly at present, a number that is likely to
double
by 2016.
The following report is a comparative study of two automobile giants tries to establish
their
respective brands of cars in the minds of the Indian Consumer. The Purpose of the
study is
effect of their marketing campaigns on the Indian consumer which tries to find value for
their
money. Volkswagen being who entered the Indian Market in the year 2005 with its
brand
Skoda had lot success in the recent years. Toyota has a partnership with Kirloskar and
entered
the Indian Market in the year 1997 and is able to establish their name in the Indian
Market.
As both of these companies have already launched their specialised cars for the Indian
Consumer, it would be interesting to find which manufacturer is able to understand the
Indian
consumer completely.
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Table of Contents
Chapter No. Contents Page no.
1. Introduction.................................................. 8
1.1 Introductory Paragraphs................................. 8
1.1.1 State of Indian Economy...................................... 9
1.1.2 Current State of Indian Auto Market................... 9
1.1.2.1 Small Vehicle Market............................................ 10
1.1.2.2 Indian Exports........................................................ 10
1.2 Statement of Problem.............................................12
1.2.1 Market Strategy and Consumer Behaviour....................12
1.3 Objectives................................................................14
1.4 Significance of the Study.......................................14
1.5 Hypothesis...............................................................15
2. Background..........................................................16
2.1 Literature Review......................................................16
2.1.1 Volkswagen.............................................................. 16
2.1.1.1 History of Volkswagen............................................. 18
2.1.2.1 Volkswagen in India.................................................. 30
2.1.2.2 Volkswagen marketing India.............................. 32
2.2.1 Toyota.................................................................... 37
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3. Methodology
3.1 Research and Design................................................. 60.
3.2 Research Process...................................................... 60
3.3 Exploratory Research............................................... 61
3.3.1 Primary Data.............................................................. 61
3.3.2 Secondary Data......................................................... 61
3.3.3 Data Collection........................................................... 61
3.2 Population and Sampling.............................................. 62
3.2.1 Sample Size.....................................................................62
3.3 Time Frame...................................................................62
3.4 Validity and Reliability.................................................63
3.4.1 Questionnaire error..................................................... 63
3.5 Assumptions............................................................... 63
4 Finding Interpretation and Conclusion
4.1 Conclusion.................................................................... 84
4.2 Hypothesis Testing........................................................84
5 Limitations and Recommendations............................ 85
Bibliography.................................................................. 86
Annexure.................................................................... 87
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Chapter I ± Introduction
1.1 Introductory Paragraphs
India ranks just behind China with the world¶s second largest population at over 1 billion
people. Less than 1 percent of the population currently owns automobiles, which is a
much
smaller proportion than the rest of the Southeast Asia region. For example, the regional
average of ownership is 16.45 percent. Nonetheless, sales of passenger vehicles in
India have
more than doubled since 2001 to over 1.5 million units. India also has one of the fastest
growing economies, and many U.S. companies view India as a potentially lucrative
market.
It is expected that the automotive industry will play an important role in helping the
economy
to continue this growth. Not only are domestic sales expected to grow dramatically, but
India
will play a significant role in the global automotive market. The world¶s top
manufacturers,
General Motors, Ford, Toyota, Honda, and others, have a significant share of already
established manufacturing bases. These manufacturers hope to not only capture an
emerging
market, but also to use these bases as export hubs to serve the region and the global
market. .
Though not to the same extent as the telecom sector, the automobile and auto-
component
industry has also emerged as one of the recent success stories. As in all other
countries, the
Indian automobile industry is one of the key drivers of industrial growth and employment
which will further gain in importance in the coming years. Its recent record of rapid
output
growth, productivity improvements and expanding share in global markets has perhaps
not
been so well documented. This study fills that gap. The study will help us understand
how the
industry¶s success is quite directly linked to the trade and industrial policy reforms
initiated in
the early 1990s. More importantly, the study will identify the critical constraints that
prevent
the industry from further expansion in the global share and emerge as one of the major
production and export hubs in the coming years. This analysis is based on a
comprehensive
review of secondary literature and an extensive fieldwork which covered the major
automobile assemblers and understanding of their marketing techniques across all the
three
tiers so as to cover the largest and the smallest component producers. This has allowed
us to
make some specific policy recommendations which have been discussed with the
industry
representatives more than once. These recommendations, if accepted and
implemented, could
contribute to India¶s emergence as one of the major automobile producing economies in
the
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world. Given our domestic demand and the entrepreneurial talent, this would be a
natural
outcome.
ð ð ðm Indian Economy
India¶s economy has experienced a continued high level of growth in recent years.
Some
predictions are that India¶s rapidly expanding economy will soon be the world¶s third
largest.
While growth is expected to slow this year, it is still expected that India will continue to
be
one of the fastest-expanding economies. Foreign direct investment (FDI) in India tripled
from $4.7 billion to $15.7 billion from FY2005/06 (April 2005-March 2006) to FY2006/07
(April 2006-March 2007).The automotive industry is one of the leading industries in
India for
FDI, and the U.S. automakers have made considerable investments since the early-
1990s.
According to statistics from the Government of India, FDI in the transportation sector,
the
fourth largest sector in India, totalled $3.5 billion from August 1991 through December
2006.India embarked on this economic liberalization plan in 1991 in the hopes of
spurring
economic growth. These reforms included opening up India to FDI. In 2002, 100 percent
foreign ownership was permitted. Growing at 8.7 percent for 2007-08, India has one of
the
fastest expanding economies in the world and the second fastest in Asia, and it has the
potential for a sustained growth of 8-10 percent for the next several years. India¶s GDP
is
$1.16 trillion, which equates to $4,139 per capita for 2007-08. With a population of over
one
billion people, India provides potentially lucrative opportunities for U.S. businesses in a
number of fields, as reflected by the growth in U.S. investments. With a large and
growing
middle class estimated to be in the hundreds of millions, along with a small wealthy
subpopulation,
the Indian population provides a largely untapped opportunity for growth in the
automotive sector.
1.1.2 Current State of the Indian Auto Market
The Indian auto market is currently small with potential for dramatic growth. While the regional
average is for 16.45 percent of the population to own a car, less than 1 percent of the Indian
population owns one. Given the large size of the middle class with increasing purchasing power
and
the youthful population (over half the population is less than 25 years of age and India has the
highest
proportion of population below 35), there is the potential to penetrate a largely untapped market.
Also, given the availability of cheap, skilled labor, India has the potential to serve as a regional
export
hub for manufacturers in the Asia-Pacific region.
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1.1.2.1 Small Vehicle Market
The Indian market is dominated by small, low-cost vehicles (two wheelers such as scooters and
motorcycles make up about 75 percent of the market share). Approximately 75 percent of
passenger
car sales in India are small cars. Tata Motors has introduced the Nano, which is both fuel-
efficient
(about 50 miles per gallon) and cheap ($2,500). Tata is expecting to launch sales of the Nano in
2008.
A number of other manufacturers have already announced plans to develop small cars in a
similar
price range in order to compete effectively in this market.
1.1.2.2 Indian Exports
Currently, Asia and Africa are India¶s largest export markets, but the European market
has
seen recent growth as well. Exports of passenger vehicles nearly tripled from 72,005 in
2002-03 to 198,478 units in 2006-07.According to the Society of Indian Automotive
Manufacturers (SIAM), approximately 1.4 million passenger vehicles were sold in
FY06/07.
The top India manufacturers, in descending order, are Maruti Suzuki, Hyundai, Tata
Motors,
Honda, Ford, India, General Motors India, Hindustan Motors, Skoda Auto India, Toyota
Kirloskar Motor, Volkswagen and Fiat India. Most of these manufacturers are already
calculating how to further expand production and sales in India. For example, Maruti
plans
to produce 1 million cars annually by 2010. Nissan, in a joint venture with Renault and
Mahindra & Mahindra, plans to open a plant in 2009 with a 400,000 unit production
capacity.
By the end of 2008, Honda will double its production capacity to 100,000 units, with a
second factory set to open in 2009. Toyota has also announced plans to invest $340
million
in a second production plant near Bangalore to produce small, affordable cars.
Production at
this new plant is scheduled to begin in 2010 with a production capacity of 100,000 units.
With India¶s goal to be a major regional export hub, coupled with manufacturers¶
increased
investments, it can be expected that the number of exports from India will continue to
rise
significantly.
The competitive nature of the automobile industry has prompted the companies to take
up
new and innovative marketing strategies to thwart the competition. The B segment of
cars is
the segment which sees maximum competition as the consumer has a number of
models to
choose from and it's the volumes which drive the margins .All the companies as a part
of
their marketing strategy offers a range of vehicles in all the segment to make sure that
the
customer is driving one of their vehicles only .Advertisements on the Audio visual
medium
are a rage as it gives the car makers an opportunity to flaunt their cars. Flashy cars can
be
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demonstrated on television but when it comes to the finger prints of the cars, print and
online
media comes to the rescue. The online medium offers a greater flexibility to the car
companies since they come with a lot of interactive features like demonstrating the
interiors
of the car with its salient features. The print medium on the other hand provides an
opportunity to the car makers to explain the function of a car in detail.
The use of conventional and unconventional marketing techniques has been regularly
used by
the car manufacturers from time to time. This report tries to a compare two automobile
giants, i.e. Volkswagen and Toyota in terms of their marketing techniques and its effect
in the
Indian market. Volkswagen is a German automobile company which recently came into
India
and is able to set-up their roots in the Indian market in a very short period of time, on
the
other hand we have Toyota who has already established its name in the Indian market.
Now ,
both of the companies are changing gears in order to attract the Indian Consumer, with
a
mindset of value delivery and cost orientation towards their products.
Philip Kotler Quotes ³The most important thing is to forecast where customers and
be in
front of them.̍
Driving the most luxurious car has been made possible by the stiff competition in the
automobile industry in India, with overseas players gathering the same momentum as
the
domestic participants. Every other day, we have been hearing about some new
launches,
some low cost cars ± all customized in a manner such that the common man is not left
behind. In 2012, the automobile industry is expected to see a growth rate of around
15%, with
the disclaimer that the auto industry in India has been hit badly by the global financial
crisis.As it has been predicted that India would be the 11 th biggest market by 2013.
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1.2 Statement of Problem
³To understand the Indian Consumer psychology on cars as well as what to expect from
big
car manufacturers such as Toyota and Volkswagen in the near future, in order to
impress the
Indian Consumers.´
All of us are consumers. We consume things of daily use; we also consume and buy
these
products according to our needs, preferences and buying power. These can be
consumable
goods, durable goods, speciality goods or, industrial goods. What we buy, how we buy,
where and when we buy, in how much quantity we buy depends on our perception, self
concept, social and cultural background and our age and family cycle, our attitudes,
beliefs
values, motivation, personality, social class and many other factors that are both
internal and
external to us. While buying, we also consider whether to buy or not to buy and, from
which
source or seller to buy. In some societies there is a lot of affluence and, these societies
can
afford to buy in greater quantities and at shorter intervals. In poor societies, the
consumer can
barely meet his barest needs. The marketers therefore try to understand the needs of
different
consumers and having understood his different behaviours which require an in-depth
study of
their internal and external environment, they formulate their plans for marketing.
Consumer
behaviour is a complex, dynamic, multidimensional process, and all marketing decisions
are
based on assumptions about consumer behaviour. Marketing strategy is the game plan
which
the firms must adhere to, in order to outdo the competitor or the plans to achieve the
desired
objective. In formulating the marketing strategy, to sell the product effectively, cost-
benefit
analysis must be undertaken. There can be many benefits of a product, for example, for
owning a motor bike one can be looking for ease of transportation, status, pleasure,
comfort
and feeling of ownership. The difference between this total benefit and total cost
constitutes
the customer value. The idea is to provide superior customer value and this requires the
formulation of a marketing strategy. The entire process consists of market analysis,
which
leads to target market selection, and then to the formulation of strategy by juggling the
product, price, promotion and distribution, so that a total product (a set of entire
characteristics) is offered. The total product creates an image in the mind of the
consumer,
who undergoes a decision process which leads to the outcome in terms of satisfaction
or
dissatisfaction, which reflect son the sales and image of the product or brand. The
process of
decision-making varies with the value of the product, the involvement of the buyer and
the
risk that is involved in deciding the product/service. Consumer is also influenced by the
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marketing activities and efforts of the marketer. All these factors lead to the formation of
attitudes and needs of the consumer.
1.2.1Marketing Strategy and Consumer Behaviour
(i) Marketing Analysis
(a) Consume
(b) Company
(c) Competition
(d) Condition
(ii) Marketing Segmentation
(e) Identify product related needs
(f) Group customers with similar need sets
(g) Describe each group
(h) Select target market
(iii) Marketing Strategy
(i) Product
(j) Price
(k) Distribution
(l) Communication
(m) Service
(iv) Consumer Decision Process
(n) Problem recognition
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(o) Information search²internal, external
(p) Alternative evaluation
(q) Purchase
(r) Use
(s) Evaluation
(v) Outcomes
(t) Customer satisfaction
(u) Sales
(v) Product/Brand image
1.3 Purpose/Objectives
1) To find out the consumer preference and reasons for buying a particular brand of
Car.
2) To study the strategy behind Volkswagen and Toyota and consumers outlook
towards that
strategy.
1.4 Significance of the Study
The significance of the study is the market analysis, of two automobile giants Toyota
and
Volkswagen. Market analysis requires an understanding of the 4-Cs which are
consumer,
conditions, competitor and the company. A study is undertaken to provide superior
customer
value, which is the main objective of the company. For providing better customer value
we
should learn the needs of the consumer, the offering of the company, vis-a-vis its
competitors
and the environment which is economic, physical, technological, etc... A consumer is
anyone
who engages himself in physical activities, of evaluating, acquiring, using or disposing
of
goods and services¶ customer is one who actually purchases a product or service from
a
particular organisation or a shop. A customer is always defined in terms of a specific
product
or company. However, the term consumer is a broader term which emphasises not only
the
actual buyer or customer, but also its users, i.e. consumers. Sometimes a product is
purchased
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by the head of the family and used by the whole family, i.e. a refrigerator or a car. There
are
some consumer behaviour roles which are played by different members of the family
1.5 Hypothesis
̌Toyota and Volkswagen made the right moves in the Indian Market and are able
to
establish their brand which is well recognised in India.̍
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Chapter-2
Background
2.1 Literature Review
2.1.1 Volkswagen
Type: Public Company
Headquarters: Germany
Industry: Automotive
Products: Cars, Trucks
Revenue: ¼113.8 billion (2008)
Operating income: ¼6.61 billion (2008)
Profit: ¼4.68 billion (2008)
Employees: 369,928(2008)
Vehicle brand companies
Audi
Bentley motors ltd.
Bugatti automobile
Subsidiaries: Lamborghini
Seat
Skoda auto
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INTRODUCTION TO VOLKSWAGEN
Type: Subsidiary of Volkswagen group
Founded: May 28, 1937
Founders: Ferdinand Porsche, Adolf Hitler
Headquarters: Wolfsburg, Germany
Area served: Worldwide
Key people:
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Scania
Volkswagen passenger car
Volkswagen commercials vehicles
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Worldwide location of various Volkswagen plants
In German, ̈Volks̉ pronounced as (folks), means people and ̈Wagen̉ means
̈Car̉.
Hence:
Volkswagen means "people's car" in German, in which it is pronounced
[fDlksvaD n].Its current tagline or slogan is Das Auto (in English The Car). Its previous
German tagline was Aus Liebe zum Automobil, which translates to: Out of Love for
the
Car, or, For Love of the Automobile, as translated by VW in other languages.
2.1.1.1History of Volkswagen
Adolf Hitler had a keen interest in cars even though he did not like to drive. In
1933,
shortly after taking over as leader of Germany, he teamed up with Ferdinand Porsche
to
make changes to Porsche's original 1931 design to make it more suited for the working
man.
Hans Ledwinka discussed his ideas with Ferdinand Porsche, who used many Tatra
design
features in the 1938 "KdF-Wagen", later known as the VW Käfer²or Volkswagen
Beetle.
When Chrysler brought out the 1934 DeSoto Airflow coupe, its design enabled Mr.
Porsche
to finalize his design of the Beetle. On 22 June 1934, Dr. Ferdinand Porsche agreed to
create the "People's Car" for Hitler's mother. After some time, they planned to
change
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some features regarding various aspects. These changes included better fuel efficiency,
reliability, ease-of-use, and economically efficient repairs and parts. The intention was
that
ordinary Europeans would buy the car by means of a savings scheme ("Save five
Marks a
week, if you want to drive your own car"), which around 336,000 people eventually
paid
into. The VW car was just one of many KdF programmes which included things such as
tours
and outings. The prefix "Volks" ("People's") was not just applied to cars, but also to
other
products in Europe; the "Volksempfänger" radio receiver for instance. On 28 May 1937,
the
Gesellschaft zur Vorbereitung des Deutschen Volkswagens was established by the
Deutsche Arbeitsfront. It was later renamed "Volkswagenwerk" on 16 September
1938.
VW Type 82E
Erwin Komenda, the longstanding Auto Union chief designer, developed the car body of
the
prototype, which was recognizably the Beetle we know today. It was one of the first to
be
evolved with the aid of a wind tunnel; unlike the Chrysler Airflow, it would be a success.
New factory started
The building of the new factory started 26 May 1938 in the new town of KdF-Stadt, now
called Wolfsburg, which had been purposely built for the factory workers. This factory
only
produced a handful of cars by the time war started in 1939. None were actually
delivered to
any holder of the completed saving stamp books, though one Type 1 Cabriolet was
presented
to Hitler on 20 April 1938 (his 49th birthday).At the times of 1st world War, Volkswagen
War
meant production changed to military vehicles, the Type 82 Kübelwagen ("Bucket
car")
utility vehicle (VW's most common wartime model), and the amphibious
Schwimmwagen
which were used to equip the German forces. By 1946 the factory was producing 1,000
cars a
month, a remarkable feat considering it was still in disrepair. Due to roof and window
damage, rain stopped production and steel to make the cars had to be bartered for new
vehicles.
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Volkswagens were first exhibited and sold in the United States in 1949, but
only sold
two units in America that first year. On its entry to the U.S. market, the VW was
briefly
sold as a "Victory Wagon". Volkswagen of America was formed in April 1955 to
standardize
sales and service in the United States. Production of the Type 1 Volkswagen Beetle
increased
dramatically over the years, the total reaching one million in 1955.Sales soared ² due
in part
to the famous advertising campaigns by New York advertising agency Doyle, Dane
Bernbach. Led by art director Helmut Krone, and copywriters Julian Koenig and Bob
Levinson, Volkswagen ads became as popular as the car, using crisp layouts and witty
copy
to lure the younger, sophisticated consumers with whom the car became associated.
Despite
the fact it was almost universally known as the Beetle (or the Bug), it was never officially
labeled as such by the manufacturer, instead referred to as the Type 1. The first
reference to
the name Beetle occurred in U.S. advertising in 1968, but not until 1998 and the Golf-
based
New Beetle would the name be adopted by Volkswagen.
Volkswagen was in serious trouble by 1973. Beetle sales had started to decline rapidly
in
European and North American markets. The company knew that Beetle production had
to
end one day, but the conundrum of replacing it had been a never-ending nightmare.
VW's
ownership of Audi / Auto Union proved to be the key to the problem - with its expertise
in
front-wheel drive, and water-cooled engines which Volkswagen so desperately needed
to
produce a credible Beetle successor. Audi influences paved the way for this new
generation
of Volkswagens, known as the Polo, Golf and Passat.
Volkswagen Golf, sold as the rabbits in USA
While Volkswagen's range of cars soon became similar to that of other large European
automakers, the Golf has been the mainstay of the Volkswagen line up since its
introduction,
and the mechanical basis for several other cars of the company. There have been six
generations of the Volkswagen Golf, the first of which was produced from the summer
of
1974 until the end of 1983 (sold as the Rabbit in the United States and Canada and as
the
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Caribe in Latin America). It would be produced in the United States as the Rabbit until
the
spring of 1984. The second-generation Golf hatchback/Jetta sedan ran from late 1983
to late
1991, and a North American version produced in Penns
1985 model year.In the 1980s, Volkswagen's sales in the United States and Canada fell
dramatically, despite the success of models like the Golf elsewhere. The Japanese and
the
Americans were able to compete with sim
States were 293,595 in 1980, but by 1984 they were down to 177,709.
Volkswagen had entered the super
and spacious three-door hatchback designed by
Germany and most of the rest of Western Europe, being one of the first foreign small
cars to
prove popular in Britain. The second generation model, launched in 1981 and sold as a
hatchback and "coupe" (with the hatchb
similar to a conventional hatchback), was an even greater success for Volkswagen. It
was
facelifted in 1990 and was still selling well after 15 years, when it was replaced by the
third
generation Polo in 1994.
The Volkswagen New Beetle concept, especially in North America.
In 1994, Volkswagen unveiled the
with a resemblance to the original Beetle but based on the Polo platform. Its genesis
was
secret and in opposition to VW management, who felt it was too backward
Management could not deny the positive pu
green-light to its development as the
Golf rather than the Polo, because the Polo frame was too small for the car to pass
crash test
Pennsylvania went on sale at the start of the
similar products at lower prices. Sales in the United
super-mini market in 1976 with the Volkswagen Polo
Bertone. It was a strong seller in West
hatchback resembling a small estate car and the coupe being
J-mays-designed Concept One, a "retro"
public response to the concept car and gave the
New Beetle. The production car would be based on the
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ylvania ilar Polo, a stylish
. ack retro"-themed car
backward-looking.
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standards in the U.S. It has been quite popular in the North America and is now gaining
in the
EU.
Volkswagen group ² the Volkswagen Bora (the sedan, still called Jetta in the USA),
New
Beetle, SEAT Toledo, SEAT León, Audi A3, Audi TT and Skoda Octavia. However, it
was
beaten into third place for the 1998 European Car of the Year award by the winning Alfa
Romeo 156 and runner-up Audi A6.
In the late 90s Volkswagen acquired the three luxury brands Lamborghini (through
Audi),
Bentley and Bugatti which were mainly due to Ferdinand Piech and added to the
group
portfolio. Volkswagen in 2005, despite challenges, still maintained North American sales
of
224,195²a dramatic increase from the low in 1993 when US sales totaled only 49,533
vehicles.VW plans to close out the decade with the release on several new vehicles
worldwide and a barrage of advertising.
The Fifth-Generation Golf
Volkswagen is recognized as one of the leading small diesel engine manufacturers, and
is
partnering with Mercedes and other companies to market BlueTec clean diesel
technology,
calling it Blue-Motion. Volkswagen has offered a number of its vehicles with a TDI
(Turbocharged Direct Injection engine), which lends class-leading fuel economy to
several
models. According to the United States Environmental Protection Agency, four of the
ten
most fuel efficient vehicles available for sale in the U.S. in 2004 were powered by
Volkswagen diesel engines
Electric and alternative fuel vehicles:
Clean diesel
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Blue Motion Volkswagen Polo
Volkswagen has been selling clean diesel-powered engines for the European market
since
2003. VW developed Turbocharged Direct Injection (TDI) technology for diesel
engines,
and it offers a wide array of TDI powertrains. As modern diesel fuel economy is 30
percent
higher than gasoline engines, a proportional reduction of greenhouse gases emissions
is
achieved with clean diesel technology. Volkswagen is also developing hybrid
technology for
diesel-electric. A VW Golf turbo-diesel hybrid concept car was exhibited in the 2008
Geneva Motor Show, which has a fuel economy of 70 mpg (3.3 liters per 100 km).
Electric vehicles:
Volkswagen and Sanyo have teamed up to develop a hybrid vehicle battery system.
Volkswagen boss Martin Winterkorn has confirmed the company plans to build compact
hybrid vehicles. There will definitely be compact hybrid models, such as Polo and Golf,
and
without any great delay´, with gasoline and diesel engines.
Flexible-fuel vehicles
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The 2003 VW Gol 1.6 Total Flex was the first full flexible
capable of running on any blend of gasoline and ethanol (E100).
Volkswagen Group owns nine
Audi : 99.55% ownership; the Audi marque is the sole active brand of the
former Auto Union, bought from
Automobili Lamborghini
in June 1998.
Bentley Motors Limited
the time known as Rolls
from Vickers, but did not include the '
marquee was subsequently restarted by
Royce plc.
flexible-fuel vehicle launched in Brazil,
active automotive companies:
, Daimler-Benz on 30 December 1964.
Lamborghini:, 100% ownership by Audi AG; company was bought
Limited,: 100% ownership by Volkswagen AG; the company (at
Rolls-Royce & Bentley Motors Ltd.) was bought on 28 July 1998
, Rolls-Royce' brand name. The Rolls
BMW who had licensed the brand from
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' Rolls-Royce
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Bugatti Automobiles
VWAG, Bugatti Automobiles SAS was created after Volkswagen purchased the right
to the Bugatti marque.
SEAT, :- Initially cooperation agreement with Audi AG, 51% (1986) and 100%
ownership by the VW Group since 1990, and was the first foreign subsidiary in the
VW Group.
®koda Auto,:- 100% ownership since 1999.
Volkswagen Passenger Cars
Volkswagen Commercial Vehicles
(VWN) (German) ²
: 100% ownership via the Volkswagen France subsidiary of
Cars,:- 100% ownership.
(VWCV) or 'Volkswagen Nutzfahrzeuge'
100% ownership; started operations as an independent entity in
c),
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1995. VWCV/VWN is in charge of all
Group and has control over
Scania AB,:- 70.94% of voting rights as at 27 February 2009 .
Current Volkswagen models
Europe Caddy Life
Eos
Fox
Golf Mk6
Golf Plus
Golf Variant
Jetta Mk5
Multivan
New Beetle
New Beetle Convertible
Passat Mk6
Passat CC
Phaeton
Polo Mk4F
Scirocco
Sharan
Touran
Tiguan
Touareg
commercial vehicle developments within the
Scania and is a shareholder in MAN AG.
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c).
Achievements of Volkswagen
In 1980, Volkswagen competed in the Paris-Dakar Rally with the Audi-developed Iltis,
placing 1st, 2nd, 4th and 9th overall.
Volkswagen enlists Dakar Champion Jutta Kleinschmidt, the first female to win the
Dakar in
2001, to help design and compete a Dakar Racer.
In 2003, VW replaced the ADAC Volkswagen Lupo Cup with the newly released Polo,
to
become the ADAC Volkswagen Polo Cup.
In 2004, Volkswagen Commercial Vehicles enter the European Truck Racing series
with the
Volkswagen Titan series truck - it became back-to-back champions for the 2004 and
2005
series.
In 2003, the Hannover based team starts with a 2WD buggy named Tarek. It places 6th
outright but took 1st in the 2WD and Diesel class.
In 2004, VW enters the newly developed Race-Touareg T2, finishing 6th overall and
2nd in
the Diesel class.
In 2005, an updated Race-Touareg with slightly more power is entered, with driver
Bruno
Saby, finishing in 3rd overall and 1st in the Diesel class!
In 2006, Volkswagen released the most powerful Race-Touareg yet: the Race-Touareg
2.
Five vehicles enter, with driver Giniel de Villers finishing in 2nd place overall, and 1st in
the
Diesel class.
In 2009, Volkswagen won the 2009 Dakar Rally held in Argentina. VW's Touareg race
models finished 1st and 2nd
Winner of numerous international awards and accolades worldwide.
2008
February 20, 2008 - Volkswagen Tiguan is voted SUV of the year by "OFF ROAD"
magazine
readers
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January 29, 2008 - Volkswagen receives award for increasing shareholder value
January 29, 2008 - Value champions 2008: Volkswagen Tiguan and Golf Estate
January 24, 2008 - Golf GTI is one of ³10 Best Cars of 2008´
January 18, 2008 - What Car? Award 2008: Double for Volkswagen
January 17, 2008 - Prize for TSI and DSG: ³Yellow Angel 2008´ Award for
Volkswagen¶s Latest
High-End Technologies
2007
May 16, 2007 - Volkswagen models voted ³Company Cars of the Year´
April 20, 2007 - Volkswagen wins 10 gold at Fleet Awards 2007
March 27, 2007 - Multiple awards for Volkswagen advertising
March 26, 2007 - "Innovation of reason" 2007: Award for high temperature fuel cell
from
Volkswagen
January 4, 2007 - Volkswagen unveiled the cleanest ever TDI engine.
2006
September 12, 2006 - Volkswagen Ranks First in J.D. Power Environmental Study
September 12, 2006 - Aerodynamic package makes Volkswagen Passat an eye-
catcher -
June 20, 2006 - Volkswagen receives environmental award from Federation of
German
Industries -
March 2, 2006 - Auto1 Award- The Passat is Europe¶s Number One -
January 20, 2006 - Passat Awarded Renowned What Car Trophy as Best Family Car
January 19, 2006 - The Passat is Germany's Favourite Car 2006-ADAC readers
award
Volkswagen the 'Gelber Engel' prize -
2005 and 2004
May 23, 2005 - The Passat - receives five star rating - top result in the Euro NCAP
crash test
April 8, 2005 - The Golf - more than 25 awards worldwide
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March 23, 2005 - Volkswagen Phaeton moving ahead
February 16, 2005 - The new Passat launched with four different engines
January 30, 2004 - The Volkswagen Touareg ± an outstanding off-road vehicle -
International
experts award prizes to the Volkswagen SUV -
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2.1.2Volkswagen in India
With its headquarters in Pune, Maharashtra (India), the Volkswagen Group is
represented by
three brands in India: Volkswagen, Audi and Skoda. The Volkswagen Group is
completing
10 years of its India journey which began with the entry of the Skoda brand in 2001,
Audi
brand and Volkswagen brand in 2007. Each brand has its own character and operates
as an
independent entity in the market. Volkswagen Group India is a part of Volkswagen AG,
which is globally represented by 9 brands- Audi, Bentley, Bugatti, Lamborghini, Scania,
Seat, Skoda, Volkswagen Commercial Vehicles (Volkswagen Nutzfahrzeuge) and
Volkswagen Passenger Cars. The product range extends from low-consumption small
cars to
luxury class vehicles and trucks. The Group operates 60 production plants around the
world.
In total more than 370,000 employees produce more than 26,600 vehicles or are
involved in
vehicle-related services each working day. The highest volume brand of the Group is
Volkswagen. Europe¶s most successful car brand has made successful inroads into the
Indian
market. Volkswagen presents itself in a variety of segments as a premium manufacturer
of
high-volume models. As a first step, the Volkswagen brand launched the globally
successful
Passat in 2007. To expand its portfolio and cater to the mid segment, Volkswagen
launched
one of the brand¶s bestselling models, the Jetta, in India in July 2008. Both the sedans
are
being assembled locally. The iconic New Beetle and the high-end SUV Touareg were
introduced in December 2009. Also available is the high-end automobile Phaeton.
From December 12, 2009 the new Pune plant has started rolling-out the hatchback
version of
the Volkswagen Polo. The made-in-India Polo was presented to the general public for
the
very first time at the Auto Expo 2010. The launch of this premium hatchback in March,
brought access to one of the Indian passenger car segments with the highest-volume
unit
sales.
Skoda entered the Indian market in 2001. Its plant in Aurangabad, which assembles a
total of
eight models including the Audi A6 and Audi A4 as well as the Volkswagen Passat and
Volkswagen Jetta, has been instrumental in this achievement. For Indian customers, the
name
of Skoda stands for high-quality, robust yet affordable cars in the compact, lower mid-
size
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and mid-size ranges. In terms of models, the Skoda product offering in India ranges
from the
Fabia through the Octavia, the Laura to the Superb. Skoda lifted the veil off its
international
bestseller SUV Yeti for the first time in India at the Auto Expo 2010.
Audi offers high-end models of interest to Indian customers. With the A8 and the Q7,
the A6,
the A4 and not forgetting the R8, the TT and the recently introduced Q5, Audi offers
topquality,
technically brilliant cars with an exclusive flair in the relevant luxury segments.
Audi¶s positioning as a leading manufacturer of such high-class vehicles, both
assembled in
India and imported through Audi India, will be systematically pursued in future. At Auto
Expo 2010, Audi also unveiled the Audi Sportback Concept ± a five-door model offering
a
glimpse into Audi's future design vocabulary.
Recognizing the importance of an extensive dealer network towards scripting a long-
term
success story, the brands of the Volkswagen Group are setting up dealerships spanning
the
entire country with Volkswagen, Skoda and Audi having in total around 120 dealerships
across the country today. They are not only laying the foundation for a substantial
increase in
sales but also doing the groundwork for offering a first-class all-round service, taking
customer satisfaction to the highest level. Keeping this in mind they launched their first
Group Logistics Service facility recently that would help make their dealer network
become
more efficient and smoothen the entire process of service. In the period between
January
2009 and December 2009, the three brands of the Volkswagen Group have together
sold
around 19,000 vehicles in India, an increase of 1.4% over 2008 in a year marked by
recession
in the auto industry.
A crucial element of the Volkswagen¶s strategy is to establish a long-term presence in
India
is the Group¶s production facility near Pune in the Chakan Industrial Park. The
investment
with a total sum of around INR 3,800 crore (580 million Euros) is the biggest investment
of a
German company realized in India so far. The plant, one of the most modern in the
Volkswagen Group has a high level of vertical integration ± not least attributable to the
high
share of local suppliers. The recruitment is of some 2,500 employees at the end of
2010,
primarily from the region itself. With the investment, the vertical integration of suppliers
and
the employment of people Volkswagen will thus demonstrate its commitment to the new
site.
Simultaneously Volkswagen contributes to a positive development of the economy of
the
region and of Maharashtra at the same time.
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The new plant was inaugurated by The Honourable Governor of Maharashtra, His
Excellency
Shri. S. C. Jamir, and Prof. Dr. Jochem Heizmann, Member of the Board of
Management of
Volkswagen Aktiengesellschaft with responsibility for µGroup Production¶ end of March
2009 and has begun building the Skoda Fabia compact car in May 2009. The launch of
Polo,
the hatchback car, is a visible testimony to Volkswagen¶s vision of ³Mobility - Made in
India´. By mid of 2010 the hatchback version will be followed by a sedan, also based on
the
new generation of the Polo but entirely different to the hatch.In recognition of its efforts
in
India, Volkswagen India won the coveted µAutomotive Company of the Year 2010¶
award at
the Inaugural Golden Steering Wheel Awards India presented by the leading automotive
magazine, Auto Bild India.
2.1.2.1Volkswagen Marketing India
Volkswagen, who? That's the common question the bosses at the world's third largest
car
maker faced every time they made a marketing pitch in India .While its two sister brands
--
Audi and Skoda Auto -- had a high recall value, very few were aware of the VW brand
name
here. Not anymore. Look at the long queue for the German car maker's latest offering --
Polo
-- launched in India just two months back. Consumers are willing to wait three to four
months
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for the hatchback priced at Rs 4,55,000 (ex-Mumbai), although cheaper models of other
manufacturers are being offered off-the-shelf.
VW claims it has confirmed orders for about 6,500 units for Polo, while 500 have been
delivered already. Neeraj Garg, director, Volkswagen Passenger Cars, Volkswagen
Group
Sales India, says VW indeed had a very low brand recall in India. To correct that, Garg
says,
"The Company opted for a continuous activity in the market because brand awareness
always
has a shelf life. We need to improve our brand awareness; we need to improve our
reach. The
fact that we have been successful in being different from others in the market is what is
going
to work for us". VW is taking the 'continuous activity' part quite seriously.
Polo was the latest in a chain of six models ranging from compact cars to big sedans to
giant
sports utility vehicles launched in the last two years. The company produces/assembles
the
Polo, Jetta and Passat in India while it imports the Phaeton, Touareg and Beetle. While
Polo
is manufactured in the company's 110,000 units per year capacity Chakan plant, the
Passat
and Jetta are assembled at Skoda's Aurangabad plant. And there's more to come. VW
is
gearing up to launch a sedan in the mass market segment later this year. The new car
in the
mid-level category will compete against models such as Maruti's SX4, Fiat's Linea,
Hyundai's
Verna and Ford's Fiesta.
It is also working on a car that would replace Polo in the entry-level segment. VW hopes
this
will generate almost double the volumes compared to Polo, which will remain its
flagship
premium, yet volume generating car. All these initiatives are expected to increase the
VW
group's share in India from the current 1 per cent to 10 per cent in the next five years.
What makes VW's game plan in India all the more interesting is its decision in
December last
year to pick a significant minority stake in Suzuki.
Though the details are sketchy, there has been intense speculation in industry circles
that the
tie-up will lead to joint development activities in India -- a country where Maruti makes
one
in two cars sold.
With so much at stake in India, VW figured out that it needed to make a huge noise
about its
challenger status in India.
So when it launched Touareg and the New Beetle Sedan late last year, VW did the
most
expensive print advertising campaign in India with a multi-crore roadblock campaign
across
all editions of j j
.
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Roadblock refers to an advertiser paying a premium to black out all other advertisers.
Mumbaikars also saw other initiatives such as a giant banner in the sky displaying the
new
Beetle and the VW logo -- a first such campaign for any automobile manufacturer.
The company is now looking at more innovative ways for taking its brand forward in a
tough
market, which is controlled by only three manufacturers -- Maruti Suzuki, Hyundai
Motors
and Tata Motors with combined sales of well over 1.4 million units (as of March 31,
2010).
Lutz Kothe, chief general manager, marketing and public relations, Volkswagen Group
Sales
India, says innovation is the way to go.
"Our cars carry innovation and so our marketing campaign should also carry innovation.
We
had to do something which could make India talk about us. We had a significant double
digit
jump in sales after the campaign," Kothe says.
But will good cars and innovative campaigns be enough for a late entrant like VW to
take on
the established leaders in areas of technology, distribution and reach?
The jury is out on this. While many point to the uphill task that a late entrant like VW has
in
building its brand in India, VW executives are confident.
"The loyalty factor for auto brands", says Kothe, "is quite low in India compared to other
markets. This means customers are looking for newer things in their cars. We do not
see a
situation where we have to pull customers, they are and will readily come to us".
Adds Garg: "The Indian car market is going to grow to three million units from 1.7 million
units in another three to four years time. That gives enough opportunity to all players for
expansion".
VW has also been building distribution. It presently has about 25 stand-alone dealers
and
intends to take it up to 40 in India as the company does not want to utilise the dealer
resources of its sister brands for distribution.There will be gradual ramp-up in the
number
later with the next phase of expansion planned for areas outside the main cities.
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2.1.2.3 SWOT Analysis Volkswagen
Table 2.5.1
Internal Strengths: Internal Weaknesses:
1. Strong R & D and
Engineering
1. Heavy Reliance on One
Product
Volkswagen Matrix 2.Strong Sales and Service
Network
(Although Several Less
Successful
3.Efficient
Production/Automation
Models were Introduced)
Capabilities 2.Rising Costs in India
3.No Experience With U.S.
Labor
Unions if Building Plant in
the U.S.
External Opportunities: SO: WO:
(Also Consider Risks)
1. Develop and Produce
Multiproduct
1. Develop Compatible
Models for
1.Growing Affluent Market
Demands
Line with Many Options, in
Different
Different Price Levels
(Ranging from
More Luxurious Cars with
Many
Price Classes (Dasher,
Scirocco, Rabbit,
Rabbit to Audi Line) (O1W1)
Options
Audi Line) (O1S1S2)
2.To Cope with Rising Costs
in
2.Attractive Offers to Build
an
2.Build Assembly Plant Using
R & D,
Germany, Build Plant in
U.S., Hiring
Assembly Plant in U.S. Engineering, and U.S. Managers with
Experience in
3.Chrysler and American
Motors Need
Production/Automation
Experience (O2
Dealing with U.S. Labor
Unions (O2
Small Engines S1S3) W2W3)
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3.Build Engines for Chrysler
and AMC
(O3S3)
External Threats: ST: WT:
1. Exchange Rate:
1. Reduce Effect of Exchange
Rate by
A. Overcome Weaknesses by
Making
Devaluation of Dollar in
Relation to
Building a Plant in the U.S.
(T1T2S1S3)
Them Strengths (Move
Toward OS
Deutshe Mark (DM) 2.Meet Competition with
Advanced
Strategy)
2.Competition from Japanese
and
Design Technology - e.g.
Rabbit (T2T3
1.Reduce Threat of
Competition by
U.S. Automakers
S1S2)
Developing Flexible Product
Line (T2
3. Fuel Shortage and Price 3.Improve Fuel Consumption
Through
W1)
Fuel Injection and Develop
Fuel Efficient
Diesel Engines (T3S1) B. Possible Options
Exercised by VW:
1.Engage in Joint Operation
with
Chrysler or AMC
2.Withdraw From U.S.
Market
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2.2.1 Toyota
History
Sakichi Toyoda, a prolific inventor, created the Toyoda Automatic Loom company based
on
his ground breaking designs, one of which was licensed to a British concern for 1 million
yen; this money was used to help found Toyota Motor Company, which was supported
by the
Japanese government partly because of the military applications. The Japanese relied
on
foreign trucks in the war in Manchuria, but with the Depression, money was scarce.
Domestic
production would reduce costs, provide jobs, and make the country more independent.
By
1936, just after the first successful Toyoda vehicles were produced, Japan demanded
that any
automakers selling in the country needed to have a majority of stockholders from Japan,
along with all officers, and stopped nearly all imports.
Toyoda's car operations were placed in the hands of Kiichiro Toyoda, Sakichi Toyoda¶s
son;
they started experimenting with two cylinder engines at first, but ended up copying the
Chevrolet 65-horsepower straight-six, using the same chassis and gearbox with styling
copied
from the Chrysler Airflow. The first engine was produced in 1934 (the Type A), the first
car
and truck in 1935 (the Model A1 and G1, respectively), and its second car design in
1936 (the
model AA). In 1937, Toyota Motor Company was split off.
From 1936 to 1943, only 1,7,57 cars were made ± 1,404 sedans and 353 phaetons
(model
AB), but Toyoda found more success building trucks and busses. (Some of these early
details
are The Toyota KB, a 4x4 produced starting in 1941, was a two-ton truck similar to the
prewar KC; it had a loading capacity of 1.5 tons and could run up to about 43 mph. The
GB
was based on the peacetime, 1.5 ton G1 truck, which in turn was based on the Model
A1 cars.
The first Toyoda truck was roughly a one-ton to one and a half-ton design, conventional
in
nature, using (after 1936) an overhead valve six-cylinder engine that appears to have
been a
clone of the Chevrolet engine of the time: indeed, a large number of parts were
interchangeable, and Toyoda trucks captured in the war were serviced by the Allies with
Chevrolet components. There was also a forty-horsepower four cylinder model, very
similar
to the six cylinder in design but rather underpowered for a truck with a full ton of
capacity.
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An era of rapid expansion: post-war Toyota history
In December 1945, Toyota was given permission by the United States military to start-
up up
peacetime production. Toyota Motor Corporation had learned from the American War
Department¶s industrial training program, which worked on process improvement and
employee development; the program, abandoned in 1945 by the United States, lived on
in
Japan as Taiichi Ohno built kaizen and lean manufacturing around it. After World War II,
Toyota was kept busy making trucks, but by 1947 it began making the Model SA, called
the
Toyopet, a name to stay with Toyota for decades, albeit attached to different cars. The
Toyopet was not powerful and had a low top speed ± 55 mph from a 27 horsepower
engine ±
but it was designed to be cheap, and to handle the rough roads of post-war Japan. In
the five
years the SA Toyopet was made, 215 were made. The SD may have been more
successful;
this taxi version saw 194 copies in just two years. The SF Toyopet was the first truly
popular
Toyota car, with a modified engine (still putting out 27 horsepower) and a taxi version.
An
RH model with a 48 horsepower engine came out shortly after By 1955, Toyota was
making
8,400 cars per year; by 1965, 600,000 cars per year.
In addition to all these cars, Toyota started producing a civilian truck named the Land
Cruiser. Styled like Jeeps, the original Land Cruisers were, according to Schreier, based
heavily on the legendary Dodge half-ton weapons carrier as well as the Bantam
(predecessor
of the Jeep) They used a bigger engine than the Jeep (their Chevrolet-clone six) and a
size
and configuration more like the Dodge weapons carrier, whose capacity it shares (one
half
ton).
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Starting in 1955, Toyota produced its first luxury car, the Crown, powered by a four
cylinder,
1.5-liter engine with a three-speed column shift, followed by the 1-liter Corona; only 700
cars
per month were made in 1955, but this rose to 11,750 in 1958, and 50,000 per month in
1964.
The start of Toyota's international sales
Toyota set up a headquarters in Hollywood in 1957; the first Toyota car registered in the
United States was a 1958 Toyopet, sold in 1958; the California license plate was
installed by
Toyota Motor Sales (USA) president Shotaro Kamiya himself, in front of the California
DMV. Two vehicles were imported, the Land Cruiser and Toyopet. Neither sold well; the
Toyopet was withdrawn while Toyota designed a car specifically modified for the
American
market ± a strategy which later gave us the Avalon and Camry. Alan wrote: ³I am the
grandson of the first Toyota dealer in the US. It all started in Larkspur California (San
Francisco Bay area). Only two vehicles were available, the Toyopet sedan and the
Land. San
Francisco was where the first distribution centre was set up.
The highlight of my grandfather's pioneer Toyota dealership was a personal visit to his
home
and showroom from Mr Toyoda, the president of the company. His visit was to thank
him for
his being the first dealer in the US. He presented my grandfather with two Seiko
watches
which I still possess. I still have all the original ads, dealer licence plate frames, and
many
photos of the dealership. The dealership came to a close in 1968 with the passing of my
grandfather. In addition to being the first dealer he also possessed the largest classic
car
collection west of the Mississippi. He had over 100 classics including Hup mobiles,
Packards,
Reos, Dodges, Franklins, Marlots, Plymouths, Grahams, etc.
In 1959, the company opened its first plant outside Japan - in Brazil. From that point on,
Toyota maintained a philosophy of localizing both production and design of its products
(that
is, adapting vehicles to the places they will be used, as well as building them there).
This
builds long-term relationships with local suppliers and local labour. Part of this also
means
that Toyota does not merely build vehicles overseas, but also designs them there, with
a
network of both design and R&D facilities in North America and Europe.
The first Americanized Toyota ² the Tiara, otherwise known as the Toyota Corona
PT20 ²
came out in 1964. The six-passenger car had a 90 gross-horsepower engine (probably
about
60-70 bhp net); it could reach 90 miles per hour, and was comfortable inside. One year
later,
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the Corona was added at under $2,000; it offered an automatic and factory air as
options, very
unusual in imported small cars at the time (as was the engine's horsepower rating).
Sales hit
6,400 in 1965, and reached 71,000 by 1968, nearly doubling each year until by 1971
Toyota
was selling over 300,000 vehicles per year, a far cry from 1964's 2,000. Toyota itself
was
very small in the late 1950s by world standards, and in 1963 was the 93rd largest non-
American corporation in the world ² but in 1966 was already 47th (in that time it went
from
being the 9th largest Japanese corporation to the 6th largest, and for that matter the
tenth
largest auto manufacturer in the world ² it would steadily move up to the #3 position
and
will soon challenge Ford for #2). In 1967, the Corona sold for a reasonable $1,760 - a
little
below the smallest Big Three sedans ² with a good balance of performance, gas
mileage,
and comfort.
By 1967, Toyota had become well established in the United States, albeit as a niche
player.
The Corona four-door sedan was seen as competing mainly against the Volkswagen
Beetle,
though this was hardly fair to the modern Corona, with its relatively large interior space
and
relatively comfortable ride. The Corona was known from its early days for quality as well
as
a low price, though rust was a serious problem until the late 1970s, causing more than
one
Corona to simply rust in half before it became old enough to have mechanical problems.
Toyota introduced another new car to the US in 1967: the Crown, available as a wagon
or a
sedan. The semi-luxury car boasted a brand new 137 cubic inch in-line six-cylinder
engine
delivering 115 horsepower (gross) at 5,200 rpm; that is a bit more than the biggest
Plymouth
slant six but less than the smallest American V8. The engine was small but had seven
main
bearings, tuned induction, semi-hemispherical heads, and was built with lightweight
alloys.
The Crown came with a four-speed manual (at the time three speeds were normal) or a
twospeed
automatic (though most Americans were used to three speed automatics). One unusual
feature was standard three-point seat belts, not to mention reclining bucket seats. The
Crown
was never a big seller but it certainly did better than many foreign cars in the segment;
the
sedan sold for $2,635, the wagon for $2,785. (Torque was 127 lb-ft at 3,600 rpm, bore
and
stroke 2.95 x 3.35, 8.8:1 compression, single two-barrel carburettor. The Plymouth slant
six
started at 170 cubic inches by comparison, and delivered 115 hp with 155 lb-ft of
torque; the
225 cubic inch slant six put out 145 hp, 215 lb-ft.) The Crown was noted for its road
manners, smooth ride, and quiet interior. Soon, Toyota brought to the US the famous
but rare
2000GT, which resembled a British sports car with a massive hood and nearly no cabin
or
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trunk. The car had set 16 world speed and endurance records by 1966, with a dual
overhead
cam six-cylinder engine (150 hp, 121 cid) and five-speed manual transmission. A
specially
made convertible version was featured in Ä . The 2000 GT had
surprisingly
slow 0-60 times of over 10 seconds, but cornering apparently made up for it, and the
quartermile
went by in a decent enough 15.9 seconds (about the same as a 1995 Neon). Not quite
a
muscle car, but it probably handled better than the best Detroit had to offer. Toyota also
had a
variety of trucks for sale in the late 1960s, as detailed in our various truck pages (see
the topof-
page menu).
The Corolla, to be America¶s favourite small car, was first imported in 1969, two years
after
its first Japanese production, followed by small pickups that earned a strong reputation
for
reliability and durability. It was the first Toyota built in the United States, starting in 1985,
at
the New United Motor Manufacturing (NUMMI) facility in Fremont, California ² a joint
venture with General Motors.
Lexus luxury cars join the Toyota stable
While Toyota built good near-luxury cars, sales of the Cressida and Crown were not
especially strong, especially given the brisk trade in Corollas and Camrys. In the 1980s,
when
Toyota seriously looked at its lagging luxury sales, Lincoln and Cadillac had both fallen
from
grace; Lincoln was relegated to the limousine and car-service trade, and Cadillac had
destroyed its reputation with the 4-6-8 engine and the barely-disguised Cavalier clone,
the
Cimarron. Chrysler had started to plunge downmarket in the 1970s, and Lee Iaccoca
was
already erasing any prestige the brand had by making thinly disguised Chrysler versions
of
entry-level Plymouths. Mercedes' quality was fairly low, Audi was suffering from the
"unintended acceleration" debacle, and, in short, the competition was in tatters. It was
time
for Toyota to create both a luxury car and a luxury brand to sell it with ² the luxury
brand
mainly because Americans had become accustomed to brands with relatively narrow
ranges
(GM had no less than five brands to reach different markets; Ford and Chrysler both
had
three.)
In the early 1980s, the F1 Project and assigned to an engineering team of 1,400
engineers,
2,300 technicians, 60 designers, and 220 support people under the leadership of Shoiji
Jimbo
and Ichiro Suzuki. Market research for the Lexus name in the United States started in
1985,
with Shoiji Jimbo attending focus groups and interviewing dealers. The first running
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prototype appeared in July 1985, with an astounding 450 running prototypes built as
Lexus
spared no expense to beat Mercedes and other luxury marques - which it did,
decisively. In
1986, tests were conducted on public roads in the US and Germany. Finally, in 1987,
the final
design was approved after eight presentations to management.
The LS400, the first Lexus, finally appeared in 1989. It was an immediate hit thanks to
its
high levels of luxury and reliability, at a lower cost than Mercedes' far less reliable and
luxurious models; the low ebb of the competition also helped Lexus to make a splash.
Lexus
would remain the leader in passenger car comfort and reliability through to the 21st
century,
though sales of other models - particularly the IS - lagged.
Modern times
Toyota instituted a three year, 36,000 mile bumper to bumper warranty starting in 1988,
the
same year the first Toyota-owned American factory started producing Camrys in
Kentucky,
to join the Corollas built in California. In 1999, Toyota Motor Corporation started listing
its
shares under the symbol TM on the New York Stock Exchange.
Scion was begin in the early 2000s, starting with three cars based off the platform of the
old
Echo (but brought up to date and refined), with two engines - a small one for the xA and
xB,
and a 2.4 with an added 50 or so horsepower for the sporty tC. Scion sales were
immediately
strong in the early-introduction states, leading to a nationwide (United States) launch
that,
with very little advertising, was still remarkably successful. Like most cars aimed at
younger
people, the Scions did not attract the younger buyers Toyota was hoping for, at least not
in as
large numbers as they wanted; but it still brought in a more youthful mix than Toyota or
Lexus. Analysts suggested that Scion was brought in mainly because Toyota buyers
were
growing older, on average, with new Toyotas meant to attract younger audiences
(MR2, Celica, Matrix) largely failing to achieve the goal of transforming Toyota's image
as a
vendor of dull but reliable and comfortable Camrys and Corollas.
Today, Toyota is one of the world's largest manufacturers of automobiles in both unit
sales
and in net sales. In the United States, Toyota has roughly double the sales of Honda
and is
battling GM and Ford for #1. It produces over 5.5 million vehicles per year, equivalent to
one
every six seconds. Toyota has tried, partly through sponsorship of numerous events,
participation in many racing venues (including NASCAR), public relations around its
(largely
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non union and Southern) American assembly plants, and other means, to position itself
as just
another American company, though no Americans appear to participate in serious
decisionmaking
at the Japan headquarters.
While German automakers tend to use symbols and numbers, and Americans tend to
throw
away names frequently, Toyota sticks by a name as long as a car is successful, and
doesn't
toss names onto cars that don't fit them. The Land Cruiser started in 1950; the Corolla
in
1966; the Celica in 1970; the Camry in 1983; the 4Runner in 1984. Notable "dropped"
names
include the Corona (with its tendency to die from severe rust), Cressida (dropped for the
introduction of Lexus in the US), unpopular pickups (T100, HiLux, Compact Pickup),
and
minivans (Van, Previa).
Mergers and acquisitions
In 1966, Toyota acquired Hino, which built trucks; commercial trucks from Toyota still
carry
the Hino name. Hino is currently gaining in popularity in Europe, and is the sales leader
for
medium and heavy-duty diesel trucks in Japan. After building its first truck as far back
as
1913 (when it was part of Tokyo Gas), what had been the truck division of Tokyo Gas
(and
which was now called Diesel Motor Industry Company) split off its commercial truck and
diesel engine division into Hino; the remaining part of the company would become
Isuzu.
Hino did build standard cars for a time, using designs licensed from Renault, but
stopped in
1967 to concentrate on heavy trucks (and avoid competing with the rest of Toyota).
Hino
currently makes a wide variety of heavy trucks and buses, and was involved in
designing
and/or producing the Tacoma, T100, 4Runner (HiLux Surf), Sequoia, and Tundra. In
1967,
Toyota took control of Daihatsu (founded in 1907 as Hatsudoki Seizo Co., Ltd), but
Toyota
did not actually buy the whole company until 1999. Daihatsu sold cars in the US from
1988
to 1992, with their Charade and Rocky making almost no impact; when Toyota bought
into
the company, it made a three-wheeled car and military four-wheel-drive vehicles.
Daihatsu
sold vehicles based on Toyotas, along, possibly, with its own designs; their small cars
and
four wheel drive vehicles have a following. Daihatsu supplies vehicles and major
components
to other automakers, and appears to be popular in South America. Denso was not
acquired,
but was simply spun off of Toyota after World War II; it was once Toyota¶s electrical
component division. It currently is a roughly $26 billion business with over 100,000
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employees and over 170 subsidiaries, selling parts to many major automakers including
American companies.
Toyota Motor Corporation today
In April 2002, Toyota adopted the 2010 Global Vision, a vision for meeting mobility
needs in
a way that respects the environment and all people. Four key themes based on trends
seen as
developing from 2020 to around 2030 are:
Toward a recycle-oriented society
Toward the age of IT and ubiquitous networks
Toward a mature society (the decline of nationalism and war)
Toward motorization on a global scale (societies with little private transport gaining
more)
These are linked to the pursuit of a new global image for Toyota with four key
components:
kind to the earth, comfort of life, excitement for the world, and respect for all people.
Whether Toyota lives up to that is a matter for debate.
Who runs Toyota now?
In 2009, Akio Toyoda took control of Toyota as President. Son of Shoichiro Toyoda,
Akio
Toyoda helped to get Toyota out of a Chinese joint venture gone bad and into a deal
with
China FAW Group; started a Web-based retailing venture in Japan; and is currently
executive
vice president in charge of purchasing, quality, product management, IT, and transport.
Akio,
born in 1957, had talked about taking the company beyond its Japanese roots, and
emphasized styling and performance in the company¶s vehicles, before the 2008-09
downturn. Since then, he has emphasized returning to Toyota¶s roots and giving up its
drive
for market share.
In 2007:
Hiroshi Okuda, Chairman. Born in 1933 - about the same time as Toyota itself -
Hiroshi Okuda has been a member of the Board of Toyota Motor Corporation since
1982, and has been the Chairman of the Board since 1999. Mr. Okuda was the
president of Toyota from 1995 to 1999, and is also a director of KDDI Corporation.
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Hiroshi Okuda joined Toyota in 1955, at about the time of the company's entrance to
the United States market. He mainly worked in Toyota's international operations, and
oversaw preparation of manufacturing plants in North America. He graduated from
Hitostubashi University with a degree in business, and has a black belt in judo.
Fujio Cho, President. Born in 1937 - not long after Toyota itself - Fujio Cho helped
to speed Toyota's decision-making but cutting the number of board members in half,
appointing three non-Japanese managing officers, and generally streamlining the
management structure. He graduated from the University of Tokyo in 1960 and
became a production specialist, mentored by none other than Taiichi Ohno. He
opened the first Toyota-owned factory in America in 1988. He is a third dan in kendo.
It is worth noting the martial arts experience of the two top Toyota leaders. Martial
arts require discipline, patience, and study; American leaders tend to be lawyers and
accountants with experience in obfuscation and penny-watching.
Some past leaders:
Eiji Toyoda (president, 1967-1982), who kept Toyota on a low profile even as the
company rapidly expanded and dramatically increased its quality and its rustproofing
capabilities
Shoichiro Toyoda (president, 1982-1992), who spread Toyota's manufacturing plants
through the world and brought Toyota¶s technology to the forefront, surpassing
Honda and just about every other automaker, while increasing reliability even further
K

Toyota City sprung from Koromo Town, a thriving silkworm center in the late 1800s and
early 1900s. As the demand for raw silk fell, the city declined, until in 1934 it invited the
newly formed Toyota to center there. The name was changed from Koromo to Toyota in
1959. The population is now 25 times its 1930 level, at 350,000.

Toyota is fairly well known for having the best-designed hybrid-electric car, the Prius,
which
former Chrysler engineer Evan Boberg claimed in 2004 was the only car that actually
saved
fuel because of its hybrid design rather than coincidental features (such as lighter
weight,
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efficient tires, and such). But Toyota's commitment goes much further. Their Australian
unit's
Earth Charter notes four principles:
Contribution towards a prosperous 21st century: Aim for growth that is in
harmony with the environment, and to challenge achievement of zero emissions
throughout all areas of business activities and set as a challenge the achievement of
zero emissions throughout all areas of business activity.
Pursuit of environmental technologies: Pursue all possible environmental
technologies, developing and establishing new technologies to enable the environment
and economy to coexist harmoniously.
Voluntary actions: Develop a voluntary improvement plan, not only based on
thorough preventative measures and compliance laws, but one that addresses
environmental issues on the global, national and regional scales, and promotes
continuous implementation.
Working in co-operation with society: Build close and cooperative relationships
with a spectrum of individuals and organizations involved in environmental
preservation including governments, local municipalities as well as with related
companies and industries.
No environmental statement is meaningful unless it is actually followed - which is one
reason
why many are so angry at Ford, which made many promises, yet continued to push gas
mileage downwards and fought even slight changes in fuel economy requirements. In
Australia, Toyota has a balanced scorecard which notes specific outcomes and
measures of
environmental action, and uses a plan-do-check-act cycle to carry them out.
Toyota India was engendered in October 1997. The initial capital investment was of Rs
seven
billion. The Toyota Motor Company of Japan has 89% of equity shares and the Kirloskar
Group of India has 11% equity shares in their JV called "Toyota Kirloskar Motor (TKM)."
Toyota Motor Company
A Japanese Multinational Company, Toyota Motor Company second in the list of largest
manufacturer of the world. A manufacturing behemoth, Toyota can potentially challenge
to
challenge the American counterparts-Honda Motor and Nissan.
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2.2.1Toyota Kirloskar Motor
The Toyota Kirloskar Motor (TKM) is of the opinion that they would contribute to the
growth of the Indian economy by contributing in the automobile sector, technological up
gradation and human resource management. They want to manufacture and sale
automobiles
in India and make India an export hub as well. They also want to maintain their global
standards here with the help of as many as
Toyota centres in India. The most important policy of TKM has been the implementation
of
the Philosophy of "Putting Customer First".
Another very important policy of TKM is to motivate their employees to achieve
perfection.
They believe that employees are the backbone of the organization and to achieve
perfection,
the employees must be motivated to work and improve continuously. That is why they
maintain corporate culture and ensures maximum stability for their employees. The
TKM is
also into social service, as they understand their responsibility towards society very well.
They are also continuously trying to ensure the betterment of their products and
services. As
they believe that, the path to their success is by providing better services and goods.
One of
their main aims is to help the Indian economy develop by creating employment
opportunities.
2.2.2Toyota Cars in India
Toyota Etios
Toyota Corolla Altis
Toyota Innova
Toyota Fortuner
Toyota Land Cruiser
Toyota Camry
Marketing and Strategy
Toyota has become a global company, with 51 manufacturing companies in 26
countries.
Their vehicles are sold in more than 170 countries. Toyota¶s primary markets are Japan,
North America, Europe and Asia.
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From April 2009 to March 2010 vehicle sale result in Japan is 2,163,000 units a
5,074,000 units. Vehicles sold by Daihatsu and Hino are included in the vehicle unit
sales
figures set forth below.
Toyota has high percentage of market share in their primary markets. In Japan, which is
the
center of its global operations,
manufacturer for more than 40 years. It held a domestic market share on a retail basis
of
45.8% in fiscal 2007, 45.6% in fiscal 2008 and 46.0% in fiscal 2009. The Toyota¶s
market
share is showed in the figures below:
Toyota has maintained its position as the largest automobile
c+/
and oversea is
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The following table shows the company spends its time and money from 2006 to 2010:
The total number of Toyota employees was 320,590 at March 31, 2010,320,808 at
March 31,
2009 and 316,121 at March 31, 2008.
In 2009, with the bad economic climate Toyota has loss 436,937 million yen. However,
in
2010 it has made profit by 209,456 million yen.

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.
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.
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Toyota¶s corporate goal is to achieve continuous growth and enhance its corporate
value by
contributing to society and gaining customers¶ enduring trust through global operations
and
through products reflecting Toyota¶s advanced technology that target the local demand
in
each market.
In order to achieve this corporate goal, Toyota strives to further enhance its technology,
supply capability and marketing, supported by improvements in quality control,
strengthening
of cost-competitiveness and personnel development.
In particular, Toyota has been dedicated to addressing environmental issues, and as
environmental awareness continues to grow in the market, Toyota strives to further
improve
technology, including its unique hybrid technology, in order to develop
environmentallyfriendly
products.
Toyota current positioning strategy:
Toyota does business in more than 170 countries globally; that¶s more countries
than McDonald¶s with restaurants in over 100 countries. (2009) (Toyota facts)
Toyota ranked 3rd on the ³World¶s Most Admired´ list, behind only Apple and
Berkshire Hathaway. (Feb. 27, 2009)
Toyota Motor Sales became the best-selling retail automaker in the U.S. (2009)
(Toyota facts)
Toyota has more hybrids on the road than all other automakers. (TMS news
release on New Product Leadership, Sept. 21, 2009. Based on R.L. Polk & Co.
U.S. Vehicles in Operation as of Jan. 1, 2009.) (Toyota facts)
Toyota was first in five of the 10 vehicle categories in annual
rankings, the most of any automaker: Toyota Highlander, Prius, RAV4 and
Sienna, and Lexus LS 460. (April 2009) (Toyota facts)
Toyota has the highest owner loyalty of any automaker. Toyota ranked #1 by
having the greatest percentage of households return to purchase or lease another
Toyota vehicle. (R.L. Polk & Co., Jan. 13, 2010)
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. The automotive operations
segment is Toyota¶s largest operating
segment by net revenues. Net revenue for the
automotive segment in 2009 is ¥5,612.6
billion.
K
Toyota is known to be one
of many companies that are committed to
building a strong relationship with its
employees. Everything is based on trust and
commitment. The company believes that it
grows as the employees grow. One way to
make this happen is by giving education as a
motivation to its employees.
!" #$
# % . This program
keeps the company to stand strong when it
comes to efficiency compare to its
competitors. After all these years, Toyota has
done a really good job in eliminating waste
and time in making its products.
""
"
The company is known to
satisfy its customers. Knowing the kind of
demand that comes from the customers is
another strength, which the company holds.
Weaknesses:
" " . Its
CEO lives in Japan, who¶s not yet completely
knowledgeable about global business. He
might be great when it comes to doing
business in his own country, but he¶s not as
handy when it comes to ethics, marketing,
management, etc abroad.
ã& It leads to
the large numbers of recall vehicles.

' "
( ) !.
It can¶t seem to provide what¶s demanded by
the European market which seeks smaller
cars and high performance vehicles. Neither
of which are Toyota¶s forte.
*
! +
' Toyota markets most of its products
in those markets. Perhaps that is why the
company is beginning to shift its attentions to
the emerging Chinese market.
), . Movements in exchange
rates could see the already narrow margins in
the car market being reduced.
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By having this information, the company is
then able to create cars that can satisfy its
customers.
-
These are Toyota
itself, Scion and Lexus. All these brands are
targeted for different social classes, which
makes it possible for the company to offer
great vehicles for all people.

K -
:
ã, "

Lexus has RX 400h hybrid, and
Toyota has it Prius. Both are based upon
advance technologies developed by the
organization. Rocketing oil prices have seen
sales of the new hybrid vehicles increase.
Toyota has also sold on its technology to
other motor manufacturers, for example Ford
has bought into the technology for its new
Explorer SUV Hybrid. Such moves can only
firm up Toyota's interest and investment in
hybrid R&D.
"
as well as increasing technologies which can
be used to create different models to suit the
changes in consumer tastes.
"

# "
In 2009, Toyota
issued a recall affecting 3.8 million Toyota
and Lexus vehicles.
: Honda,
Nissan, GM, Hyundai. Moreover, soon
Toyota will also have to compete with China,
which has announced that it will begin
exporting vehicles in 2010. Surely, China is
known to be able to produce cheaper
products. Hence, this will come to a threat in
price competition, which Toyota has to face
in the near future.
( " leading to
decrease profit margins and create low
competition.
)
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.
Doing everything to take all the opportunities
to increase sales and building better
relationship with the customers through its
products. Toyota has been making innovative
and high tech cars for so many years, being
the first from its competitors to see this kind
of market demand.
!such
as China, India, Brazil and developing
countries as Indonesia, Vietnam.

hanges in the laws, regulations
and government policies in the markets in
which Toyota operates that affect its
automotive operations, particularly laws,
regulations and policies relating to vehicle
safety including recalls, trade, environmental
protection, vehicle emissions and vehicle fuel
economy, as well as changes in laws,
regulations and government policies that
affect Toyota¶s other operations, including
the outcome of current and future litigation
and other legal proceedings.
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³Without focusing on environmental, energy and safety measures there can be no future
for
motor vehicles´. This is a comment of Toyota¶s President Katsuaki Watanabe.
Toyota¶s automobile ownership exceeds 1 billion vehicles in 2010 and will likely reach
1.5
billion vehicles in 2020. Toyota is very much aware of the tremendous impact this will
have
on the environment and human safety.
For this purpose, Toyota is concentrating its efforts on improving fuel economy by
making
cars smaller and lighter, while enhancing power efficiency. Toyota announced a
business
partnership with Tesla Motors for developing electric vehicle.
Chief Executive Officer Akio Toyoda said Toyota would try to be the world leader in
building environmentally conscious vehicles and touted the company's cooperation with
Tesla Motors Inc. Toyota is building a RAV4 electric car using Tesla battery technology.
(Mike Ramsey, 2010)
Toyota has been developing too many safety systems such as: ABS (anti-lock brake
system)
VSC (Vehicle Stability Control) and VDIM (Vehicle Dynamics Integrated Management)
systems Toyota¶s Pre-crash Safety System. Toyota also offers a training program
throughout
the year at the TOYOTA Safety Education Center ³mobilitas´ completed in 2005 inside
Fuji
Speedway in Shizuoka Prefecture.
Toyota is expanding its sustainable plant activities worldwide, beginning with
manufacturing
facilities in the United States, the United Kingdom, France and Thailand. In August
2008,
The Ban Pho Plant of Toyota Motor Thailand Co., Ltd. conducted one of the largest-
ever
tree-planting events in Thailand with about 14,000 people planting 100,000 trees.
Toyotảs New Objectives Improvement:
With fuel price increasing, people are not buying large cars in the numbers they used to.
Small cars consume much less fuel, and are better for the environment. For this reason,
Toyota should develop new objectives for assisting to continue to do business in this
µnew
environment´. The new objectives can be:
Long term objectives:
1) Sale Hybrid cars at all countries which Toyota doing business in 2020.
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2) Promote the development of Toyota¶s eco-cars with fuel effective and safety.
Short term objectives:
1) Increase Hybrid cars sales 100% in 2011 by 2010.
2) Increase 2 Hybrid production factories and 2 R&D centers in oversea.
The new objectives are consistent with the forecasted needs of the business by its
competitive
advantage and positioning.

TMC has been successful in launching and supplying the Hybrid car market. In
December
1997, TMC launched the Toyota "Prius"²the world's first mass-produced hybrid
vehicle.
The use of the Toyota hybrid system was subsequently expanded to such vehicles as
minivans, SUVs and rear-wheel-drive sedans. In 2009, TMC broadened its range of
hybrid
vehicles further with the launch of the third-generation Prius, as well as two other
dedicated
hybrid vehicles, the Lexus "HS250h" and the Toyota "Sai". Currently, nine TMC-
produced
hybrid passenger vehicle models and three hybrid commercial vehicle models are sold
in
Japan. (Toyota, 2010)
Outside Japan, TMC has eight hybrid passenger vehicle models are sold in
approximately 80
countries and regions, with cumulative overseas sales having topped 1.68 million units.
TMC
is committed to augmenting this lineup even further and increasing the number of
countries
and regions in which it sells hybrid vehicles. (Toyota, 2010)
With new type of Hybrid vehicles, TMC has survey with 267 new Prius owners. Its result
is:
Completely satisfied buyers on exterior styling: 52%.
Completely satisfied buyers on interior styling: 62%, roominess 73%.
Satisfaction is very high on environmental friendliness with 91% of buyers
completely satisfied.
Completely satisfied buyers on fuel economy with 64%, quietness when driving
with 67%, body workmanship & finish with 71%, no squeaks and rattles with
67%. (Toyota-euro)
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##
Hybrid cars are the future of the auto industry globally, and the TMC has achieved the 1
million car milestone of hybrid vehicles in Japan in 2010, which makes up a large
proportion
of the global figure of 2.88 million.
Toyota Motor Corp. is No. 1 among automakers for patent applications and awards in
alternative power technology. Toyota now holds 16% of all patents and applications in
the
field globally. (Automotive News, Nov. 2, 2009)
TMC, the industry leader in hybrid vehicles with 13 years on the road, keeps a sharp
focus on
conventional engine for obvious reasons: the more efficient the gasoline-powered
component
of the hybrid, the more efficient the hybrid. (COLLEEN BARRY and GREG KELLER
(AP)
± Oct 1, 2010)
With the new technology of air flow for better efficiency, Toyota Prius just spends 89
g/km
compare with Fiat¶ 92 grams of carbon emissions per kilometer and the Fiesta with
Ford's
Econetic technology produces 98 g/km. (COLLEEN BARRY and GREG KELLER (AP) ±
Oct 1, 2010)
These objectives also are ethical and legal by reasons:
Increasing environment friendly product;
Reducing CO2 emissions;
Increase the local factories leading to reducing the traffic, emission caused by
transportation and logistics.
Increasing of jobs for local employees.
TMC has enough financial to implement above subject. Toyota annually spends nearly
$9
billion (more than $1 million an hour), on research and development to develop the cars
and
technologies of the future. Toyota spends more on R&D than any company in the world.
(Toyota facts_3)
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Toyota Auris Hybrid new campaign:
In 2010 TMC has introduced Toyota Auris Hybrid vehicle for sale outside Japan. The
advantages and the µcharacter¶ of the product are represented of four elements:
product, price,
place, promotion.
#
Toyota Auris Hybrid available in two grades ± T4and T Spirit with strengths of product
are:
First full hybrid model in the European C-segment
Toyota Auris Hybrid: fuel economy starting from 3.8l/100 km
The Toyota Auris Hybrid emits at least 89g CO2/km
Zero-rated for UK road tax (Vehicle Excise Duty) (carsession,2010)
Toyota Auris Hybrid has been designed specifically for the European market. With using
in
the new model go beyond exceptional fuel economy and low CO2 emissions. Therefore,
it is
user-friendly and delivers a quiet, comfortable and stress-free drive unlike anything else
in
the segment.
#
Styled in Europe, the Auris is a completely new model that replaces the long-running
Corolla
and is built in the UK. European buyers like bold design, and aside from a chunkier,
Yarisstyle
nose, the proportions and profile are barely changed from the Corolla's.
With the stringent of environment protection regulations in European, Auris Hybrid is
really
to create as the leader of friendly product. TMC hope that Auris Hybrid will meet
demand of
customers in this market who want to care their living environment more and more by
using
the green products.
Auris Hybrid not only provides a service that will help reduce the city¶s carbon
emissions, it
also helps the owner reduce their running cost by providing a fuel-efficient
transportation
with 3.8l/100km.
With the µpull strategy¶, TMC get the product to customers; give them the perfect choose
in
the economic downtown period in European.
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#
TMC has clear understanding of the situation of Euro economic climate and it key target
market (young people and other environment, economic effective and high technology
caring
buyers), and has decided pricing strategy and advertising campaign to push the
customer buy
this product with best address their needs and the positioning of Toyota Auris Hybrid
The vehicle has a starting price of EUR 22,150 (UK) and its running cost is low.
#
Website and showroom are two good address which proving full information such as
product
feature, benefit, safety feature and getting customer¶s orders or feedbacks. Website is
the
cheapest tool and working 24 hours in 7 days per week.
As the pull strategy, the interest in and demand for product even before it reaches the
stores
are made possible because social medial. Using a one-page of spots magazine ad and
30-
second television ad to provides much importance information at 6 months before sales.
Using the sales personnel and test-drive as effective tools to persuade the customers
and
provide more information such as service after sales, sales assistance and to
encourage
orders.
As the push strategy, TMC spent 5% amount of its marketing resource on maintaining
relationship with its distributors and provide the action plans to distributors such as
discount
20% service fees, expand warranty time more 6 months and reward the excellent
distributor
of the year.
The KPI of promotion is proving a new eco-product to Euro market, increasing sales to
400,000 units in next year to assist the TMC achieves the sales objective.
As the ethical and legal promotion, this campaign assists the number of green product
users
will increase, the reaffirming people¶s acceptance of hybrid technology worldwide
!
High price.
New product so difficult to change customer¶s behavior.
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TMC should promote advertising campaign to show the benefits of product and increase
the
customer¶s awareness about eco-Toyota Auris Hybrid.

High competitive. (Nissan, Audi, Honda, Ford)
Economic downtown.
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Chapter-3
Methodology
To understand the Indian consumer, a proper research methods need to be applied to
get the
correct results. A research process consists of stages or steps that guide the project
from its
conception through the final analysis, recommendations and ultimate actions. The
research
process provides a systematic, planned approach to the research project and ensures
that all
aspects of the research project are consistent with each other. Research studies evolve
through a series of steps, each representing the answer to a key question. This chapter
aims to
understand the research methodology establishing a framework of evaluation and
revaluation
of primary and secondary research. The techniques and concepts used during primary
research in order to arrive at findings; which are also dealt with and lead to a logical
deduction towards the analysis and results. From the prescribed methodology followed,
following would be obtained.
3.1 Research Design
I propose to first conduct a intensive secondary research to understand the full impact
and
implication of the industry, to review and critique the industry norms and reports, on
which certain issues shall be selected, which I feel remain unanswered or liable to
change,
this shall be further taken up in the next stage of exploratory research. This stage shall
help
me to restrict and select only the important question and issue, which inhabit growth
and
segmentation in the industry. The various tasks that I have undertaken in the research
design
process are
Defining the information need
Design the exploratory, descriptive and causal research
3.2 Research Process
The research process has four distinct yet interrelated steps for research analysis It has
a
logical and hierarchical ordering:
Determination of information research problem.
Development of appropriate research design.
Execution of research design.
Communication of results.
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Each step is viewed as a separate process that includes a combination of task, step and
specific procedure. The steps undertake are logical, objective, systematic, reliable,
valid,
impersonal and ongoing.
3.3 Exploratory Research
The method I used for exploratory research was
Ø Primary Data
Ø Secondary data
3.3.1 Primary Data
New data gathered to help solve the problem at hand. As compared to secondary data
which
is previously gathered data. An example is information gathered by a questionnaire.
Qualitative or quantitative data that are newly collected in the course of research.
In the report the primary data source are questionnaires filled by 100 respondents.
3.3.2 Secondary Data
Information that already exists somewhere, having been collected for another purpose.
Sources include census reports, trade publications, and subscription services. In my
report i
had many sources for secondary data. The data available on the websites of both
Volkswagen
and Toyota were used as the secondary data , as well as brochures of the company
very useful
for the research. I also used information published in Times of India and The Economic
Times. Before writing the report a thorough secondary data research was also done.
3.3.3 Data Collection
Data collection took place with the help of filling of questionnaires. The questionnaire
method has come to the more widely used and economical means of data collection.
The
common factor in all varieties of the questionnaire method is this reliance on verbal
responses to questions, written or oral. I found it essential to make sure the
questionnaire was easy to read and understand to all spectrums of people in the
sample. It was also important as researcher to respect the samples time and energy
hence
the questionnaire was designed in such a way, that its administration would not exceed
4-5
minutes. These questionnaires were personally administered. The first hand information
was
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collected by making the people fill the questionnaires. The primary data collected by
directly
interacting with the people.
3.2 Population and Sampling
It is a description of the characteristics of that group of people from whom a course is intended.
It
attempts to describe them as they are rather than as the describer would like them to be. Also
called
the audience the audience to be served by our project includes key demographic
information (i.e.; age, sex etc.).The specific population intended as beneficiaries of a program.
The
target population is the population I want to make conclude an ideal situation; the sampling
frames to
matches the target population. A specific resource set that is the object or target of
investigation. The
audience defined in age, background, ability, and preferences, among other things, for which a
given
course of instruction is intended. I have selected the sample trough Simple random Sampling.
3.2.1 Sample Size
This involves figuring out how many samples one need. The numbers of samples you
need
are affected by the following factors:
Project goals
How you plan to analyze your data
How variable your data are or are likely to be
How precisely you want to measure change or trend
The number of years over which you want to detect a trend
How many times a year you will sample each point .
I have targeted 100 people for the purpose of the research. The target population
influences
the sample size. The target population represents Pune/Dellhi region. The people were
from
different professional backgrounds.
3.3 Time Frame
The total research took 2 months to complete.
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3.4 Validity and Reliability
3.4.1 Questionnaire error
I have ensured that the questionnaire design was careful so that only required data is
concisely revealed and there is no redundant data generated. The questions are
worded
carefully so that the question are not loaded and does not lead to a bias in the
respondents
mind.
3.5 Assumptions: There aren¶t any specific assumptions in the report.
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Chapter 4
The following results are according to the questionnaire
Q1) What type of car do you prefer?
Interpretation
People prefer luxury cars of brands Toyota and Volkswagen. This proves that
Volkswagen
and Toyota are able set themselves as luxury car markers in India.
Toyota are very inspirational brands in India, they are definitely able to make a mark in
the
luxury car segment in India, but after the launch of the Polo and the Etios
manufacturers are eying a high stake in the small car segment.
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filled by 100 respondents.
Fig 4.1.1
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Q2) Which car makers you will prefer on the basis of reliability?
Interpretation
European and Japanese cars are neck
and Korean are least reliable. The reasons to be reliable on European and Japanese
cars
would be both of these cars have a range
market with their new range of cars. Toyota is known for its quality and Volkswagen is
known for its German engineering; that is why European and Japanese cars are
considered to
be most reliable.
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to neck on the basis of reliability; whereas Am
of luxury cars, and they are entering the Indian
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Q3) What Attributes you expect from cars of Volkswagen and Toyota?
Interpretation
The consumers expect good technology from com
interprets that the Indian consumer wants new technological development in the
automobile
sector. Toyota and Volkswagen being one of the top
Indian consumers expects good technological development as the market is pre
Maruti and Hyundai. Volkswagen with its Tagline ³German Engineering Made For India´
and Toyota¶s ³Quality Revolution´ tagline compels t
rational for these brands.
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companies of Toyota and Volkswagen. This
auto manufacturers in the India, the
the Indian Customers to be very asp
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Volkswagen Centric
Q) Do you know meaning of ³Das Auto´?
Fig. 4.1.4
Interpretation
Only 26% people knew the meaning of ³Das Auto´, which is the punch line of the car
Manufacturer in India. Das auto is Volkswagen¶s Tagline in German which means the
car. As
only 26% people know the meaning Volkswagen needs to inform the meaning of this
tagline
to their prospect buyers.
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Q) Which car of Volkswagen you are planning to buy?
Interpretation
Volkswagen Polo saw the maximum number of bookings, whereas phaeton had the
least
number of bookings. This shows polo has stood up remarkable in the Hatchback
and the Indian consumer shifting from brands such as Hyundai and Maruti.
star of the Volkswagen¶s entry in India has motivated Volkswagen to launch new cars
such as
Vento which is specially made for the Indian Market.
market share at the end of 2018, Volkswagen is all set to target customers who
Maruti and Hyundai.
Fig 4.1.5
With company eyeing a 40% of the

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are loyal to
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According to the consumer
Engineering. The rise of Indian middle
understanding about the cars and considers that German engineering is one of the best
in the
world.
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the prime reason for buying a Volkswagen car is German
middle- class in last few years has developed
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Fig 4.1.7
Interpretation
Only 22% of respondents have seen the polo rally organised by Volkswagen and see it
as a
promotional strategy. Targeting middle ± class people to buy polo by organising rallies,
had a
cold response. The rallies were organised to attract car lovers to show the presence of
Polo in
the Indian Market.
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Q) What do you know about after sales service of Volkswagen?
.Interpretation
70% people of respondents think Volkswagen¶s after sales service is expensive.
after its massive marketing campaign needs to make after
competitors having after sales service very cheap, Volkswagen need to work on this
aspect.
Q)From the following which of the marketing strategies of Volkswagen
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Interpretation:
The Indian consumer is appreciating innovative ideas, for development of cars. It is
definitely
a change in trend. The consumer also appreciates Volkswagens¶ entry into the Indian
market.
Q) How do you rate Volkswagen promotional strategies used by launching Vento?(
Volkswagen has partnered with the TOI and The Hindu for a nationwide communication
strategy wherein whenever the reader opens the newspaper, a voice speaks to him
about the
car manufacturer's latest variant in India. A light-sensitive chip is attached to the page
announcing the arrival of a perfectly engineered car by Volkswagen).
Fig 4.1.10
Interpretation:
The respondents consider Volkswagen unconventional marketing techniques as
exceptional
and will bring a new meaning of promotion through print media. This mass media
campaign
was designed MUDRA communications. The strategy was to show Volkswagen¶s new
sedan
is ready to take on the Japanese Engineering and Vento is hard to let it go. Volkswagen
also
showed how that car was crafted with so much passion for the Indian Customer. It
clearly
shows how Volkswagen wants to develop customer loyalty in India.
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Q)What is your reaction to Roadblock done by Volkswagen?( roadblock refers to an
advertiser paying a premium to black out all other advertisers )
Fig 4.1.11
Interpretation
Road blocking strategy adopted by Volkswagen is being appreciated by the consumer,
the
consumer were well aware about this strategy. In fact the consumers believe that they
were
made aware that Volkswagen has arrived in India. In the year 2007 Volkswagen took to
time
to understand the Indian market with its brand Skoda, and eventually opened a
manufacturing
plant in Chakan. Volkswagen spend about $5 million to block any other advertisers. This
strategy was early adopted by Hutch when it became Vodafone.
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Q) Where have u seen different advertisements of Volkswagen
Interpretation:
The maximum number of advertisements was seen in the Newspapers, followed
magazines, TV and others. Times of India and the Hindu being the partner of Volksw
has resulted maximum number customers seeing the advertisements in newspapers.
The auto
magazines are only made for people who want a better insight of the
this Volkswagen concentrated on showing its product and its specifications. They also
paid
publishers extra premium to compare their cars with other brand of cars, and show how
German engineering is made for India. This shows how Vol
drive brand awareness rather than being purely sales driven.
)
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product; understanding
Volkswagen marketing was meant to
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kswagen
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Interpretation: Etios and corolla had the maximum number of bookings, whereas
land
cruiser and camry had minimum number of bookings. This shows by a developing a
new Q
class Toyota is been able establish itself in
quality promise is also reason for a high demand of Toyota cars in the Indian market
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the lower end sedan sector as well. The Toyota¶s

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Interpretation: The maximum customers buy Toyota because of their Quality
Promise.
quality promise has been executed because of the principles of Kaizen and
Toyota Production System has also one of the reasons its growth in India and all around
the
world.
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Q) What are the reasons of Toyota¶s rising Market Share?
Fig 4.1.15
Interpretation:
Value Delivery Network is considered one of the most important strategies of Toyota, to
capture the Indian market, according to the consumer. How does Toyota design a new
vehicle
made up of thousands of component parts, manage the daily flow of orders and
shipments
with suppliers and assembly plants? Each business operation is different, but all of them
share one common trait: all are systems for creating customer value²value delivery
systems.
A company¶s performance is the direct consequence of how effective the system is
managed.
Companies that operate more efficiently and responsively than their competitors have
better
Managed value delivery systems. Toyota has understood the delivery network in India
and is
capitalising on this. According to the Toyota Customer is the most important thing for
them.
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Q) What do you know about Toyota¶s after sale service?
þ

According to respondents the after sales service of Toyota is priced at a
Therefore in order to establish,
believes that supplying a vehicle only represents a small part of the relationship
between
them and the customer. For this reason, Toyota is happy to respond to any problems
which
may occur after the vehicle has arrived at its end destination and take great pride in the
level
of satisfaction which many of their customers have shown as a result of their efforts.
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Interpretation: A lot respondent
products, Q- class development is considered to be a prime reason that the Indian
consumers
are interested in buying Etios.
it¶s a great example of multi- channel market
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think that Innovation is Toyota¶s backbone for marketing it
The launch of Etios has been a success story for Toyota itself,
marketing.
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Q) How was your experience at the Toyota Dealership?
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Fig 4.1.18
þ

The respondents experience at the Toyota dealership was very good
because
of their Value delivery network .Apart from their sales Toyota believes in creating value
of
their product and for their customers. Considering customer as the most important
person, the
customer believes that Toyota has the right product for them.
Q) How do you rate Toyota promotional strategies used by launching Etios?( Creation
of all
new Q class for Indian Customers. The new Toyota hatchback is said to have been
designed
for the mass volume segment of the Indian market and will compete in the Rs.3-5 lakh
price
band. Toyota is committed to give their customers a Q-Class experience through a
sales and
service network that will be expanded to 150 dealerships by the end of this year.)
?

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Interpretation:
75% of respondents that the launch of car like etios is outstanding and
attract a new breed of customers;
of Q-class has also impacted people as this car is specially made for India
punch line of Etios is ³My first, India¶s First´.
´Q Promise´ a campaign focused at demonstrating and placing Toyota as a Quality
driven
organizations. This was followed by an all India Tour ³Q Wo
concept. The choice of cities was very unique here«Chandigarh, Lucknow, Mumbai,
Ahmedabad, Pune, Cochin, Chennai, Bangalore, Calicut, Goa, Hyderabad, Vijaywada,
Coimbatore, Bangalore, Bhubaneshwar, Kolkata, Siliguri, Guwahati, V
Jalandhar, Indore, Surat. At first glance one can make out that this is just not a random
selection of cities, these are cities that hold lot of potential and are slowly turning out to
be
biggest markets after the metros. This event ende
2010«symbolic gesture to project that the ETIOS is for India.
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Toyota will able to
Customers who want value for their money. The Creation
Toyota¶s campaign is really a success story .
World Caravan´ with the ETIOS
ended at Surat on the 15
in the mean time the social
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channels were very effectively used to drive the concept and the research that went
behind
creating this car. Social channel is the only channel that has the strength and merit of
creating
a 2 way communication. Toyota rightly used this to create a community that can discuss
the
Car and provide feedback and reactions to the ongoing campaigns. Exemplary uses of
social
channel to inform, listens, and respond. I am not sure but I believe; these channels also
enjoyed some exclusivity in terms of information. The exact launch date was first
communicated here followed by a press release.
End of September the New ETIOS website was launched. Facebook and Twitter users
were
the first to know. The website provided information on the ETIOS concept and had
games,
quizzes (all focused towards INDIA First concept). Winners were awarded with some
ETIOS
branded stuff. Website used as a teaser and to further strengthen the India First
message. The
launch of the vehicle was live on this website. One will be surprised to note that the
content
of the website changed the minute the vehicle was officially launched @Bangalore.
Such
meticulous planning and exemplary execution.
The following strategy was a great example of multi-channel marketing. Following were
the
features :
Analyze this information and one will find some best practices for Multi Channel
Marketing:
1. Use the channel as per its Merit
2. Each Channel needs to have its unique message but with a single objective
3. Distribute the three key functions of Marketing( Inform, Engage and Listen) across
channels
4. Create an ecosystem to provide seamless experience to the customers
5. Continuously monitor and study the channel effectiveness
6. See if channels can be provided some exclusivity
We are not sure of the sales figures that ETIOS will have in future, but for the time being
the
marketing team has exactly delivered what they would have envisioned 10 Months
back.
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Q) Where have you seen different advertisements of Toyota?
Interpretation:
Marketing campaign of Toyota is mainly through television and through auto magazines.
Toyota is such well known brand in the Indian market its market¶s itself only
with a new product. The rest of the marketing of Toyota is done with hoardings installed
in
urban cities and with promotional campaigns.
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4.1 Conclusion:
The Indian car market has transformed drastically over the years with more and more
global
car-makers hitting Indian streets aggressively. Volkswagen is a late entrant. While
entering a
new market it is extremely crucial for a company to understand the business viability, to
understand the environment it plans to conduct business in and most importantly to
understand its customers. For Volkswagen this is the right time since the automobile
market
here is now growing at a fast pace and it is expected to touch 2 million by 2014.
According to
the report Volkswagen has the right products to satiate the Indian consumers and to
take
advantage of this growth in the country. According to the response Volkswagen is an
inspirational brand in a country like India. Volkswagen proactively addresses the cost of
ownership and the cost of acquisition for its growing customer family using these two
communication measures thereby enabling quicker purchase decision. The brand has
always
been a desirable one worldwide. In a competitive market like India these small
measures
make Volkswagen products more desirable as it does not revolve around a superbly
engineered car only, but the promise of what it stands for, that is ³a great car means a
great
deal. ³At the company Volkswagen has have clear brand values and all communication
underlines these values and positioning. A German engineered car stands for things like
innovative technology, safety, stability and sturdiness. Volkswagen biggest
differentiation is
that they make this technology accessible across all products thereby ensuring it
touches our
customers in every segment. Volkswagen also eyes a 40% market share by the end of
2018.On the other hand Toyota has based itself on the quality strategy. The customers
are
very happy with launch of etios and the development of Q- class. Toyota marketing
hasn¶t
been mass as Volkswagen but their products and their Quality Promise results
developing
new customer¶s every day.
4.3 Hypothesis Testing
The hypothesis stated earlier ̌Toyota and Volkswagen made the right moves in the
Indian Market and are able to establish their brand which is well recognised
in India̍is
proved positive or true according to my report.
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Chapter 5
5.1 Recommendations:
Volkswagen and Toyota are both doing well in marketing their products. Volkswagen
which
is fairly new in Indian has tried to develop themselves as an inspirational brand for the
Indian
consumer. With their mass marketing campaign they are only concentrating on the
urban
sector in India. In order to increase sales Volkswagen needs open more service centres
and
dealerships and ensure that manufacturing takes place in India only On the other hand
Toyota
is an old player in the Indian; the company understands the needs and aspirations of
the
consumer. Toyota needs to advertise as well as market their product little more with
competition increased by the entry of Volkswagen in India.
5.2 Limitations:
The research study suffers from following limitations:
The Pune market was too vast and it was not possible to cover each and every
customer in the available short span of time.
Generally, the respondents were busy in their work and were not interested in
responding.
Respondents were reluctant to disclose complete and correct information about
themselves and their organization.
Most respondents were reluctant to provide exact information as in why they
preferred particular company¶s car.
The research was conducted in present prevailing conditions. There can be some
fluctuations in the market, which can offset the findings.
The project is carried out for the period of 3 months only.
Measurement of customer satisfaction is complex subjects, which uses non-objectives
method, which is not reliable.
The sample unit were only 100 respondents.
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Bibliography
Journals
1. Marketing Application ProjectåVolkswagen New Beetle
2. Consumer Behaviour in Indian Car Market
3. Determinants of Competitiveness of the Indian Auto Industry
4. Indian Auto Industry An Overview: ACMA
5. Sify Automobile Industry Analysis
6. Volkswagen Power train Strategy .
7. 4ps Toyota
8. Economic Times
9. Auto Car India
5.2.2 Websites
1. http://www.wikipedia.org/
2. http://www.google.co.in/
3. >>
>
4.http://www.acmainfo.com/docmgr/Status_of_Auto_Industry/Status_Indian_Auto_Indus
try.
pdf
5.http://www.angelfire.com/electronic2/nichole_thurm/images/New%20Beetle%20Marke
t%
20Analysis.pdf
6. http://www.viewsline.com/Interview.jsp?id=27801&/__LUTZ_KOTHE,_HEAD_-
_MARKETING,_VOLKSWAGEN_GROUP_SALES_INDIA/__Innovation_is_the_Backbo
ne_of_VW's_Marketing_Strategy.html
7.
http://www.4psbusinessandmarketing.com/21102010/storyd.asp?sid=4096&pageno=1
8. http://economictimes.indiatimes.com/news/news-byindustry/
auto/automobiles/Volkswagens-Polo-drive-hit-by-partsshortage/
articleshow/6249760.cms
9. http://economictimes.indiatimes.com/news/news-by-
industry/auto/automobiles/marutisuzuki-
to-supply-a-star-to-volkswagen/articleshow/7553049.cms
10. http://economictimes.indiatimes.com/news/international-business/Volkswagen-to-
crack-
7-mn-global-sales-in-2010/articleshow/6976668.cms
11. >>

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Annexure
Questionnaire- Volkswagen

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Project Report Symbiosis Centre For Management Studies

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