Executive Summary

Key facts:

TMC, the worlds 10th largest public company as per the Forbes Global 2000 ranking
released earlier this year
TKM is a low sixth in the pecking order of Indian passenger vehicle manufacturers, with a
market share of 4.61%.
The Supreme Court, while hearing a petition on air pollution in Delhi, passed a sudden order
banning registration of all new cars and sports utility vehicles with diesel engines with a
capacity of 2,000 cc or more in the National Capital Region (NCR).
The companys overall Innova sales have fallen by 10% and that of Fortuner by 12%.
On this ban, vice chairman and whole-time director, TKM, Mr Shekar Vishwanathan has gave
opinion that they support efforts to reduce pollution, but the high level of pollution is not
caused by cars alone. Punishing just the automotive sector is unfair.
When the UPA government restored control over prices of diesel, LPG and kerosene in 2004
(the NDA government had de-regulated both petrol and diesel prices in 2002), the gap
between the cost of petrol and diesel widened. This saw a sudden shift to diesel engines,
catching many automakers by surprise. They had then scrambled to build diesel engine
manufacturing capacity.
TKM has set up a diesel engine facility at an investment of Rs 1200 crore and its capacity
utilisation is barely 30% today.
Toyota ranks 6th in Forbess Most Valued Brands list this year.
One of the oldest companies in the Toyota group and Kirloskar group had setup Kirloskar
Toyota textile machinery to manufacture textile machinery.
Livas market share in the segment is just 1.7%.
TKM has master the art of frugal manufacturing, aggressive pricing and maintain high level
of localisation.
TKM exports of 14786 units from India in 2015-16 (TOYOTA currently has 294 dealers in
India).

2) Identify the critical environmental factors which have affected the operations of TKM in
India negatively as well as positively
Following are the factors which have affected the operations of TKM in India.

Negatively affected operations

o Due to Air pollution in Delhi, an order passed banning all new Cars and sports utility
vehicles with diesel engines with a capacity of 2000 cc or more in the national capital
region. Because of this reason TKM targeted segment was badly hit.
o The National Green Tribunal (NGT) ordered regional transport offices in Delhi to deregister all diesel vehicles older than 10 years.

Positively affected operations

Fuel efficient
The cars manufactured by Toyota and of good quality and has low maintenance cost.
New manufacturing plant.
This helped the company to increase their exports from India. Approximate around 14786
units are exported from India.
Channel of distribution.
It has a great distribution channel with around 249 dealers across India.
All their cars are already Bharat Stage IV compliant.

2) What strategic decisions you think are responsible for TKMs success as well as failures in
Indian auto market?
Strategic decisions for TKM success are as follows

TMC owing a 74% stake in kirloskar Toyota textile machinery to manufacture textile
machinery.
Entering with a sedan car Etios was a great success to the company.

Failure

Entering in the market of compact cars.

Failure in R&D activity, as Toyota introduces their car after a long time in the market.

3) What according to you should be the way forward for TKM to succeed and grow in Indian
market?
o
o
o
o

As sedan and SUV is their competitive advantage they should mainly focus on this two
segments then that of compact cars.
They should make agreements with the cab service agencies for taxies ,thus this will lead to
more sale of their units as they are fuel efficient and good with speed and performance
More capital is to be made on R&D activities in order to understand demand as well as
consumer mind-set for better growth of the company.
People from India have a mind-set of having a good mileage and low cost car, then that of
having a car with more of safety features. Therefore, they should introduce a model with good
mileage in affordable prices with the safety features.