|
|
| |
|
       
|
Contn. 0 To 33 In 10 Years Toyota Revs
Up » Create two parallel tracks for car launches: A CBU route for big and luxury cars, and local assembly for small sub-compacts and compact sedans. » In another eight years, up production from 50,000 to 10 lakh and aim for a 33 per cent share of the passenger car market. » Launch a blockbuster sub-compact from the Yaris family to generate sales volumes, and strengthen local vendor base. » Use India as a production base for sub-compacts, which will be exported to markets in Europe and Asia. » Leverage its superlative manufacturing systems to keep costs low and quality high; reinforce the Toyota brand via superior customer service. » Ramp up manufacturing capacity as and when sales increase; aim for flexible assembly to lower cost of new launches. From Laggard to Leader Rarely does Toyota ever enter a new market first. Invariably, it allows competitors to lead, and waits for the market's initial characteristics to be revealed before firming up its own strategy. Far from suffering for it, Toyota has actually been able to read the market better and because of that overtake the early entrants in marketshare. For example, it didn't get into the Indonesian market until 1973, two years after General Motors entered the country through a tie-up with Isuzu. But today Toyota leads the market with a 28 per cent share. Even in Vietnam, the Japanese major has been able to combat fierce competition and raise its market share to 36 per cent from 29 per cent over the last two years. The only exception to its successful run in Asia seems to be Thailand, where its marketshare has dropped from 36 per cent to 28 per cent, and could slide further in 2001. But few doubt Toyota's ability to bounce back. But the battles that Toyota really wants to win are in China and India, where it has only recently entered. Both the markets are growing. The Chinese, for example, are expected to buy 9 lakh cars a year by 2005. Toyota got an approval to manufacture in China only last year, and will have to beat General Motors, which has set up the biggest foreign automotive plant (at a cost of $2 billion). Beautiful Ugly Duckling
Toyota's 'Milk Run' For many years after it was founded in 1937, Toyota was derided as a company made up of ''a bunch of farmers''. Reason? It hired a lot of farmers to work its assembly lines and, in fact, the founding family's name Toyoda meant ''abundant rice field'' in Japanese (the word Toyota, however, has no meaning in that language). Over the six decades, Toyota has come to acquire the most fearsome reputation in the industry for its exemplary manufacturing system, where costs and inefficiencies are pared not just every day, but every second. Take a look at its low-fat Bidadi operations: the maximum amount of raw material at the factory at any point of time does not exceed two hours' production requirement; all finished cars leave the factory within 48 hours, and no dealer is sent more than 15 days' stock. So, just how does Toyota do it? The trick lies in its famous 'milk run', which involves picking up small quantities of supplies from vendors throughout the day. This is how it works: every morning small trucks leave a central stocking point (there is one each in Pune, Delhi, and Chennai), picking up supplies from the local vendors. These trucks then return to the hub, where the supplies are transferred to a bigger truck, which leaves for TKM every day. For vendors based in and around Bangalore, the milk runs are straight from the plant to the vendor and back. |
|
Issue Contents Write to us Subscription Syndication INDIA TODAY |
INDIA TODAY PLUS | COMPUTERS TODAY | |
 |
 |
Two
years ago when this bread-box was unveiled in the market as Toyota's
maiden offering, competitors gasped-not in awe, but in sheer horror. They
couldn't understand why of the hundreds of cars in its portfolio, the
Japanese auto giant had chosen a 15-year-old workhorse, which sold by the
name of Kijang in markets like Indonesia. But within days of the launch,
the mystery unravelled. The shrewd car maker had picked the softest spot
in the market. There was virtually no competition. Sure, Tata Engineering
had a brisk seller in Sumo, but it wasn't exactly a multi-utility vehicle
like Qualis. Rather, it was a mini-truck 407 converted into a rugged
all-purpose van. More importantly, Toyota proved that even its dated
offering-upgraded for India-could offer better quality than its
competitors. Backed by a carefully thought-out advertising campaign that
communicated Toyota's formidable global reputation, Qualis went on a roll.
It redefined the market and made buyers look at MUVs as an alternative to
passenger cars. Despite being slightly more expensive than Sumo, it sold
21,000 units in calendar 2000. This year, it seems to be on its way to
meeting its 31,000 sales target, and has taken a comfortable lead over
Sumo. For instance, Toyota had already sold 21,474 Qualis between January
and September 2001, compared to Sumo's 18,000 or so. Toyota expects Qualis
to be around for another six to seven years after which it will bring in
another MUV as a replacement.