Toyota Motor Corporation is one of the largest manufacturer automobile in the world. It is the subsidiary of Toyota group.

Toyota began its operations in 1933 as a division of the Toyoda Automatic Loom Works Ltd now a subsidiary.

The headquarters of the company is located in Toyota city In 1966, Toyota acquired Hino motor company which

manufactures buses and large trucks. The other company acquired by Toyota during that period was Nippondenso Company ltd, Daihitsu Motor Company ltd.

At present Toyota have many assembly plants and distributors in various countries.

History of Toyota

Toyota made it world’s second automobiles manufacturer over taking Ford Motor Co

According to analyst US automaker have narrowed the quality gap where as Toyota keeps on focusing the quality of the products and this is the success for them.

According to the data published by CNN Money 2011, Toyota ranks 10 in top 500 Fortune Company.

It generates an employment of 3, 25,905 people The revenue generated during the financial year 2010-2011 were $

235,364.0 million and the profit earned during that period was $ 3,591.3 million. (Money.cnn.com)

History of Toyota

Series/Parallel Hybrid System

Full Hybrid System comprises of an engine which is supported by an electric motor which works in tandem to create a greater efficiency than a normal petrol/ diesel engine.

It reduces the fuel consumption as well as emissions while providing the necessary power to the car.

This system uses dual source of power through electric motor and petrol engine, further it generates electricity while running on electric motors.

The car can be started either through the electric motors, or by using both electric motor and petrol engine depending on the driving condition.

The generator helps in charging the battery while the car is running. 

Hybrid System

Battery – The battery is light weight. The high power of output nickel metal hydride provides high power output in relation to its weight. The hybrid system maintains the battery charge by monitoring the acceleration.

(Toyota-global.com)

Essential components of Hybrid System

Engine – It’s a 1.8L 2ZR-FRE engine.

Maximum power output: 73kw (99ps)/5,200 rpm. Maximum Torque: 142Nm (14.5kgf-m)/4,000 rpm.

(Toyota-global.com)

Electric Motor – Max output: 60kw (82PS). Max Torque: 207N.m (21.1kgf-m)

(Toyota-global.com)

Power Split Device : It distributes the power produced by the engine to the drive train and to the generator. The power is distributed efficiently by using the planetary carrier which consists of a ring gear, sun gear, pinion gear and a planetary gear.

(Toyota-global.com)

Regenerative Braking: The Hybrid system reuses the kinetic energy to generate electricity with the help of the electric motor. This helps in increasing the fuel efficiency.

(Toyota-global.com)

Generator: High output electric motor and engine is used to enhance the acceleration while driving from low to high speed.

(Toyota-global.com)

Power Control Unit: This system consists of an inverter, voltage- boosting converter and an AC/DC converter to run the car on the motor. The inverter converts DC supplied by battery to AC which is used in the generator.

(Toyota-global.com)

Reduction Gear: It reduces the high rpm of the front motors which is then transferred to the wheels which increases the torque amplification. Therefore having a smooth acceleration while driving.

(Toyota-global.com)

It is an established brand in India with an experience of over 16 years in Indian market. Toyota is trusted for its quality.

Toyota has an experience of selling hybrid cars across the globe which will help them in marketing their product in the right way.

It is a Fortune 500 company ranked 10. It’s a leader in hybrid car segment across the globe. It has huge capital reserves which can be used to invest in hybrid

technology in India to cut down import duty which increases the cost of the vehicle. And the Infrastructure of Toyota in India is quite sound.

SWOT AnalysisStrength

Being a new technology, its acceptance demands time and heavy marketing. Hybrid technology is new in India, Investment is high which increases the risk.

Threats Competitors like Honda, Tesla are a major threat to Toyota as FDI has been

given the clean chit from the government. FDI norms could allow easy entry to many international players.

Weakness

Increase in fuel prices on everyday basis. Changing customer preference and needs. Increasing awareness and need for eco friendly products. No successful competitor in hybrid segment. Government subsidy and tax benefits in setting up a hybrid

technology plant in India. First mover advantage as hybrid car segment is still in its nascent

stage.

Opportunity

Indian government has taken steps to invest and develop hybrid vehicles in India.

Indian ministry has planning to invest Rs.13000-14000 crores to establish a research and development centers.

The ministry has also announced that they will provide subsidiary of Rs. 1.5 lakhs on the hybrid cars on the ex-factory price of the car which will help in reducing the cost price of the car. (livemint.com)

Govt. announced reducing the duty fee on import materials of cars. Indian government also announced to promote the manufacturing

of hybrids cars in India the ministry will provide concession on excise duty.

External environment analysisPolitical

Constant rise in GDP from last five years has led to increase in the purchasing power and changes in the needs and life style of people and hence the growth in the automotive sector is evident.

The fuel prices are constantly increasing in India. Further there is a very less difference between the price of petrol and diesel. It has led to dissatisfaction among diesel consumers who are paying more while buying the car.

About 29 per cent of India is in the urban areas. This is expected to go to 45 per cent by 2030. (kannan. Swetha, 2011)

Economic

With the advancement of new and innovative technology, hybrid can be the preferred option.

Indian government and many other foreign companies are investing in hybrid technology.

Fuel efficiency also plays a big role in capturing the Indian market share which is the USP of the hybrid technology.

Technological

People think more about their prestige and image rather than environment friendly while buying a car.

The Global Habit Survey’ which was conducted in 34 major cities in Asia, Europe and other United States consumers has shown interest in eco friendly cars.

Environmental  Hybrid cars would protect the environment and reduces the dependence of

fossil fuel. It is estimated that the sale of about 6-7 million units of electric vehicles will led to save of about 2.2.-2.5 million tone of fossils fuel consumption. (economywatch.com)

Social

Idea Generation: Increasing gasoline requirements, the prices of petrol, diesel as well as CNG are getting

higher. This gives an opportunity and space for hybrid car market in India in coming years.

To control the pollution in the environment.

Hybrid market is at its nascent stage. To have the first mover advantage over the competitors.

It is estimated that there will be approx 4-5 million more cars in next few years compared to 1.5 million cars today. As the penetration level in India is very low, there is a tune of 8 cars against 1000 people where china has tune of 50 cars against 1000 person. (Seth.Yogima, 2009)

Toyota has the experience and the technology which can be used to exploit the hybrid market in India which is at a nascent stage.

Disruptive Innovation is the need of the hour, which is to create a new segment all together

and exploit it.

There is a need for an executive level sedan which has luxury as well as fuel efficiency.

New Product Development for Toyota

Idea GenerationSales of Executive Level Sedans

(SIAM)

Further only 6 units of Toyota Prius were sold during September 2012 to February 2013.

The executive level sedans are more or less priced between Rs.11 lakhs to Rs.15 lakhs.

Their fuel efficiency is quite low as engine size big. The fuel efficiency varies from 9 to 15 km/litre.

Therefore there is a need for a car that provides luxury as well as fuel efficiency. Therefore Hybrid technology is the need of the hour.

Model (petrol/diesel) Sales from September 2012-February 2013

Honda Civic 323 units

Toyota Corolla Altis 1863 units

Chevrolet Cruze 1716 units

Volkswagen Jetta 1345 units

Hyundai Elantra 3348 units

Idea Screening

Option 1- Manufacturing the Prius locally and relaunch it with a lower price.

Option 2- Manufacturing a new car with a new design, hybrid technology and new features.

Option 3- Using Incremental Innovation where Toyota Corolla Altis design will be used with the hybrid engine 1.8-litre (2ZR-FXE) made for the new prius. (Toyota)

Concept Testing & Developing

As we know Indians are the most difficult customers to satisfy, as they are very price sensitive in nature.

Further they want every feature in the car but at competitive prices.

Indians customers are risk averse in nature. Therefore acceptance of a product which is new in the market takes some time, till they are totally convinced about the product.

Business Analysis

Cost: The main objective is to build a car which is prized between Rs.11lakhs to Rs.15 lakhs which will be placed in the executive level segment.

By using the same platform of Corolla Altis will provide us not investing in designing the car from the start.

Further the new hybrid engine 1.8-litre (2ZR-FXE) will be used in this new car which will also reduce the research and development on the new engine.

Demand Projections: Total sale of executive sedan market comprises of 20,000 cars per year growing at 5%.

Therefore our objective will be to capture 1% of the market by selling 200 cars.

Required Investment: Toyota is an established brand in India. Toyota being the no 1 company in the automobile sector in the world has the capital muscle to invest and take such a risk.

Competition: Hybrid technology is in its nascent stage; hence the competition in Indian market is not that stiff. Toyota could fetch the first mover advantage. In coming years.

Profitability: The main aim is to sell 200 units of our car and get the acceptance by the Indian customers. Initially profits do not matter.

Product Development:

Toyota Corolla Altis Hybrid Toyota corolla altis hybrid is the new hybrid car which is eco

friendly in nature. It is a combination of luxury and fuel efficiency creating a newer market in itself.

Features of corolla Altis hybrid: Transmission: Electrically Controlled Continuously Variable

Transmission (Automatic) Dimension & Weight: Length x Width x Height (mm): 4540 x 1760 x 1480 Wheelbase (mm): 2600; Tread Front/Rear (mm): 1530/1535 Kerb Weight/Gvw (kg): 1180kg-1270kg / 1640kg-1670 kg Fuel Tank: 55 litres ; Mileage: 25 km/litre Performance: Total max Output (kw): 100 Chasis: Suspension: Front- Macpherson Struts Rear- Torsion beam Brakes type: Hydraulic with electronic control and

regenerative Front/Rear- Ventilated Disc/ Solid Disc

Min turning radius : 5.2 m

Tyres: 195/65 R15 Tubeless

Engine: 1.8-litre (2ZR-FXE)Displacement (cc): 1797Max output (kw/rpm): 73/5200Max Torque: 142/4200

Motor type: Synchronous alternating current motorMax Voltage (v): 650Max Output (kw): 60Max Torque(Nm): 207

Battery type: Sealed Ni-MHModules: 28 (201.6v)Capacity (Ah): 6.5Connection Method: SeriesSeats: Leather

Features Continued

Test Marketing & Commercialization

It is a highly innovative product which is placed in the executive sedan segment against Chevrolet Cruze, Honda Civic and Volkswagen Jetta, Hyundai Elantra & Toyota Corolla.

It will be targeted to the early adopters and innovators.

The car will be available in all the dealers across the country. Initially Delhi, Mumbai, Kolkata & Chennai will be crucial markets.

It is a highly innovative product which is placed in the executive sedan segment against Chevrolet Cruze, Honda Civic and Volkswagen Jetta, Hyundai Elantra & Toyota Corolla.

It will be targeted to the early adopters and innovators. The car will be available in all the dealers across the country. Initially Delhi, Mumbai, Kolkata & Chennai will be crucial markets. The Unique selling Proposition is its Hybrid technology which produces

25km/litre. It will be positioned to the early adopters and innovators who want luxury and fuel efficiency with an aggressive price.

Marketing objective is to sell 200 units of Toyota corolla altis hybrid in 2013/14

Marketing Strategy

Hybrid technology is in its nascent stage; hence the competition in Indian market is not that stiff. Toyota could fetch the first mover advantage. In coming years well establish companies like Maruti Suzuki is planning to come up with India’s smallest hybrid model in INR 10 lakh bracket.(ibtimes.co.in)

TATA motors are planning to launch TATA Nano in support with Bosch technology - start-stop system and with Norway based Miljobil Grenland. (timesofindia.indiatimes.com)

PSA Peugeot Citroen is setting up a plant in Gujarat, India. They had two joint ventures in china. They would come up with diesel-electric hybrid cars in 2014. (Darji, 2011)

Electric car Reva group was taken over by Mahindra & Mahindra group. So, Mahindra is working towards launching hybrid car in coming years. (timesofindia.indiatimes.com).

Future Competitive analysis

Product MixIt is placed in the executive sedan segment. The car boasts of the unique hybrid technology which increases the mileage with a unique design and trusted Japanese engineering. It’s also eco friendly in nature. The fuel mileage of the car is 25km/litre.

Price MixToyota Corolla Altis Hybrid will be prized around Rs.12.5 Lakhs to place it in the executive sedan segment. The cost of the car will be reduced due to the local manufacturing of it.

Place MixThe car will be sold across the country with its strong dealership network of Toyota through 173 dealers. The car would be manufactured at Toyota’s manufacturing unit in Bangalore.

Marketing Mix

Print media will be used extensively to evaluate the response of the product.

A celebrity like Aamir Khan who has the image of a normal, sensible guy would be made the brand ambassador for the car to create the buzz.

Toyota’s Greenathon campaign will be used to promote our eco friendly car.

Extensively marketed at various auto shows and expos to give an insight about the car which will help in creating the buzz.

It should focus on comparative analysis advertisements which will give a fair idea to the customers about the product.

Social media should be used to create awareness among the customers.

Promotion Mix

Fuel efficiency is the utmost criteria for any vehicle due to constant increase in fuel prices. Further our fossil reserves are going down and with this consumption; there is a high possibility of no fuel in the future. In India 75% of the fuel is imported, therefore fuel prices will always fluctuate. Hybrid technology is the future. Toyota is the leader in hybrid car segment; hence it has the expertise in exploiting the market as it is well established in India. By launching Toyota Corolla Altis Hybrid, Toyota can exploit the market and have the first mover advantage.

Conclusion