LAUNCH OF THE AYGOLAUNCH OF THE AYGO

TOYOTA STRATEGIES AND INITIATIVES TOYOTA STRATEGIES AND INITIATIVES IN EUROPEIN EUROPE

TOYOTA GLOBAL:BECOMING TOYOTA GLOBAL:BECOMING NO:1NO:1

In 2005,toyota sales hit the 2 million units In 2005,toyota sales hit the 2 million units level for the 1level for the 1stst time and toyota held 13.7% time and toyota held 13.7% of the US market(up from 9.3% in 2000)of the US market(up from 9.3% in 2000)

Between 1990 and 2005,the no. of toyota Between 1990 and 2005,the no. of toyota factories increased from 20 factories in 14 factories increased from 20 factories in 14 countries to 47n factories in 26 countries.countries to 47n factories in 26 countries.

Toyota was one of the 9 members of the Toyota was one of the 9 members of the “$10 billion club”.(2005: net income $12.35 “$10 billion club”.(2005: net income $12.35 billion and revenue of $189 billion).billion and revenue of $189 billion).

Toyota wants to increase its market share Toyota wants to increase its market share of 11%(2005) to 15%(2010).of 11%(2005) to 15%(2010).

TOYOTA &GMTOYOTA &GM

GM MOTORSGM MOTORS

Market cap – 2.2%Market cap – 2.2%

Sales – 13%Sales – 13%

TOYOTATOYOTA

Market cap – 35%Market cap – 35%

Sales – 11%Sales – 11%

TOYOTA IN EUROPETOYOTA IN EUROPE““WE ARE GROWING STEP BY STEPWE ARE GROWING STEP BY STEP””

With the launch of the YARIS model in With the launch of the YARIS model in 1999 toyota sales took off.1999 toyota sales took off.

The goal of achieving 8,00,000 units in The goal of achieving 8,00,000 units in europe was reached 2 years ahead of europe was reached 2 years ahead of time.(in 2003 instead of 2005).time.(in 2003 instead of 2005).

PRIUS- the hybrid car, helped toyota to PRIUS- the hybrid car, helped toyota to become the technology and also helped it become the technology and also helped it to position itself better. But only 18,000 to position itself better. But only 18,000 units were sold in europe.units were sold in europe.

LEXUS- only 25,000 units sold in europeLEXUS- only 25,000 units sold in europe

compared to 2,50,000 units in Americacompared to 2,50,000 units in America

Among the automobile manufacturing Among the automobile manufacturing companies of asia toyota held highest companies of asia toyota held highest market share & sales in europe.market share & sales in europe.

Inspite of all these success it stated “its Inspite of all these success it stated “its sales goal of 1.2 million units in europe by sales goal of 1.2 million units in europe by 2010.2010.

PSAPSA(Peugeot Société Anonyme) (Peugeot Société Anonyme)

France based company was almost not famous France based company was almost not famous among end users but the company brand among end users but the company brand peugeot and citroen was famous.peugeot and citroen was famous.

PSA increased its european market share from PSA increased its european market share from 12% to 15.5%(1998-2003) and fell down by 14% 12% to 15.5%(1998-2003) and fell down by 14% by 2005.by 2005.

But still it was european 2But still it was european 2ndnd biggest automobile biggest automobile manafacturer in europe after VW.manafacturer in europe after VW.

PSA is known for its JV with fiat, ford, and BMW PSA is known for its JV with fiat, ford, and BMW

TOYOTA & PSA AS JOINED TOYOTA & PSA AS JOINED FORCESFORCES

TOYOTA PEUGEOT CTROEN TOYOTA PEUGEOT CTROEN AUTOMOBILE (TPCA)AUTOMOBILE (TPCA)

50:50 JV, kolin, czeh republic50:50 JV, kolin, czeh republic

3,00,000 units max capacity(2:1)3,00,000 units max capacity(2:1)

93% of parts were standardized among 3 93% of parts were standardized among 3 type cars.(peugeot 107, citroen C1, aygo)type cars.(peugeot 107, citroen C1, aygo)

3000 employees3000 employees

Toyota TPS used for running the factoryToyota TPS used for running the factory

PSA manage all purchasing functions.PSA manage all purchasing functions.

80% of parts were supplied by suppliers in 80% of parts were supplied by suppliers in czeh republic and TPCA were directly czeh republic and TPCA were directly dealing with 150 tier 1 suppliers.dealing with 150 tier 1 suppliers.

In additional to that european suppliers In additional to that european suppliers were eager in supplying to TPCA as many were eager in supplying to TPCA as many of their traditional customers has cut down of their traditional customers has cut down their production. So they can grow with their production. So they can grow with toyota in europe.toyota in europe.

RUNNING TPCA AND RUNNING TPCA AND OVERCOMING OBSTACLESOVERCOMING OBSTACLESABSENTEEISM: TPCA operate on shifts ABSENTEEISM: TPCA operate on shifts and employees work 4 days/week and 10 and employees work 4 days/week and 10 hours/day. But they were pushed to work hours/day. But they were pushed to work continuously for 6 days which resulted in continuously for 6 days which resulted in much unscheduled leave. Management much unscheduled leave. Management soon changed the shifts and took soon changed the shifts and took necessary calls.necessary calls.

TALENT MANAGEMENT: Hyundai started TALENT MANAGEMENT: Hyundai started hiring for its czeh factory.hiring for its czeh factory.

BARRIERS: TPCA was dealing with 3 BARRIERS: TPCA was dealing with 3 company cultures namely japanese, company cultures namely japanese, french and czeh. 2 companies had french and czeh. 2 companies had different production style and history. Also different production style and history. Also need to overcome language barrier.need to overcome language barrier.

MEETING STRUCTURE: Inorder to minimize MEETING STRUCTURE: Inorder to minimize miscommunication TPCA had systematic meeting miscommunication TPCA had systematic meeting structure.structure.

DAILY PRODUCTION MEETING: Eveyday 8:30a.m DAILY PRODUCTION MEETING: Eveyday 8:30a.m managers discuss about quality, absenteeism and managers discuss about quality, absenteeism and major problemsmajor problems

PROJECT LEADERS MEETINGS: 10 to 20 managers PROJECT LEADERS MEETINGS: 10 to 20 managers from PSA and 30 to 40 managers from toyota meet on from PSA and 30 to 40 managers from toyota meet on monthly basis.monthly basis.

STEERING COMMITTEE: TPCA’s highest STEERING COMMITTEE: TPCA’s highest decision making committee. Critical decision making committee. Critical decisions are made. Consist of 5 members decisions are made. Consist of 5 members from each company and meeting is carried from each company and meeting is carried yearly twice either at toyota HQ in tokyo or yearly twice either at toyota HQ in tokyo or in PSA HQ in paris.in PSA HQ in paris.

AYGO=I+GO

MARKETING CHALLENGES MARKETING CHALLENGES OF AYGOOF AYGO

93% standardized parts and how to 93% standardized parts and how to differentiate from its 2 siblings was really a differentiate from its 2 siblings was really a problemproblem

Just in 2005 toyota launched Yaris which Just in 2005 toyota launched Yaris which is bigger than AYGO and also $3000 more is bigger than AYGO and also $3000 more so more commission was given.so more commission was given.

Plant capacity is 300000 (2:1) which Plant capacity is 300000 (2:1) which should be determined only by demand.should be determined only by demand.

The average age of toyoto customers is The average age of toyoto customers is 50+ years in europe. This is the 150+ years in europe. This is the 1stst time time they are targeting.they are targeting.

UNDERSTANDING GEN YUNDERSTANDING GEN Y

IndiviualisticIndiviualistic

Internet savvyInternet savvy

Immune to traditional advertisementsImmune to traditional advertisements

AttributeAttribute

MARKETING STRATEGIES MARKETING STRATEGIES FOR AYGOFOR AYGO

Phase 1Phase 1

Phase 2Phase 2

Sponsoring rap concertsSponsoring rap concerts

Dealer trainingDealer training

Aygo nightsAygo nights

Aygo city tourAygo city tour

Mobile servicesMobile services

CONCLUSIONCONCLUSION

Michael porter suggests that strategy Michael porter suggests that strategy formulation requires an analysis of the formulation requires an analysis of the attractiveness of the industry and the attractiveness of the industry and the company’s position within the industry. company’s position within the industry. This analysis becomes the basis of This analysis becomes the basis of formulating generic strategies.formulating generic strategies.

GENERIC STRATEGIESGENERIC STRATEGIES

PORTER’S INDUSTRY ANALYSIS:PORTER’S INDUSTRY ANALYSIS:

5 forces5 forces

Competition among companiesCompetition among companies

Threat of new companies entering the Threat of new companies entering the marketmarket

Threat of substitutesThreat of substitutes

Bargaining power of suppliersBargaining power of suppliers

Bargaining power of buyersBargaining power of buyers

GENERIC STRATEGIESGENERIC STRATEGIES

Overall cost leadership strategyOverall cost leadership strategy

Differentiation strategyDifferentiation strategy

Focused strategyFocused strategy

Toyota 'world's largest Toyota 'world's largest carmaker' carmaker'

Japan's Toyota has overtaken US rival General Motors to become the world's biggest carmaker, a spokesman for the company has said. According to company figures, Toyota sold 2.348 million vehicles in the first three months of 2007. General Motors (GM) is estimated to have sold 2.26 million cars and small trucks during the same period.

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