Toyota Kirloskar Motor Pvt Ltd

TOYOTA KIRLOSKAR MOTOR PVT LTD Background Established in 1997 as a joint venture between the Kirloskar Group and the Toyota Motor Corporation (TMC), Toyota Kirloskar Motor Private Limited (TKM) has grown rapidly to emerge as a significant player in India’s passenger car and MUV market segments. The company has a long-term goal in India and aims to play a major role in the development of the automotive industry and the creation of employment opportunities, not only through its dealer network, but also through ancillary industries. Toyota had a turnover of USS 587.5 million last year, and the company has started making profits from last year. Toyota has brought in US$ 152 million in equity, and has invested another US$ 40 million from internal accruals. Toyota employs 2,300 people in India. TKM, along with its dedicated dealers and suppliers, has adopted the “Growing Together” philosophy of its parent company, TMC, to create long-term business growth. In this way, TKM aims to further contribute to progress in the Indian automotive industry, realise greater employment opportunities for local citizens, improve the quality of life of its team members and promote robust economic activity in India.

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Well-established in the MUV and passenger car segments Toyota first entered the Indian automotive market in the MUV segment with the launch of the Qualis model in 2000. The model was instantly popular and quickly grew within a short span of 2 years to capture 20 per cent market share from established players like M&M and Tata Motors. Quick on the heels of Qualis’ success, TKM launched two passenger car models – Camry in 2002, in the high-end luxury segment and Corolla in 2003, in the luxury segment. Both cars have again proved popular and registered impressive growths – Corolla sold 9,546 units in 2003-04, capturing 40 per cent of the segment share, while Camry has also grown at 140 per cent to 1,117 units during the last year.

Factors for success Toyota’s success in India has been due to several factors – a renowned brand, world-class manufacturing processes and practices, in-depth market analysis, superior product quality and committed employees.

Leveraging brand strength Even before its entry into India, the Toyota brand was well known in India and had a strong aspiration value. Toyota also reinforced its technical strength and customer care through innovative ad campaigns.

the 1990s, Toyota decided to enter India through the MUV segment. This was based on an extensive market study and analysis that indicated the potential for a world class MUV that would offer the driving experience of a car, at an affordable price. The MUV segment at that time had two major players – Tata Motors and M&M, whose products, while rugged and reliable, were not seen as substitutes for a car. Thus, while other MNCs were competing for share in an increasingly crowded passenger car market, Toyota was established itself in the MUV segment.

World class manufacturing processes and practices The Toyota Production System (TPS), originally a means of achieving mass-production efficiency with a small production volume of a few thousand vehicles per year, has become a sought after best practice for achieving highly efficient ‘lean manufacturing’ for manufacturing industries worldwide. Just-in-time (JIT) production and in-process quality assurance are hallmarks of the TPS, which is applied throughout the company’s global production structure. Also, Toyota’s world class research and development has made possible technological advancements in quality manufacturing, safety, efficiency and environment preservation, all of which contribute to enhancing customer satisfaction.

Committed employees In-depth market analysis Despite strong growth in the passenger car market in

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True to its belief that the employees are the main source of strength for an organisation, Toyota seeks

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to create a corporate culture where values such as “Continuous Improvement” and “Respect for People” are fully reflected in all actual corporate and individual activities. The company takes maximum care to ensure stability of employment and strives to improve working conditions. TKM’s young team members are regularly sent to Japan, Indonesia and Taiwan for training. More than 400 team members have benefited from such programmes at various Toyota plants worldwide. The company also has an ongoing suggestions scheme that seeks to increase and reward employees’ commitment and involvement.

Developing India as a global source for auto parts Toyota has set up Toyota Kirloskar Auto Parts Limited, to produce transmission components (gear boxes) for its global operations. Apart from this, it also made fresh investments last year into its JV Kirloskar Toyota Textile Machinery Limited (KTTM), to build capability for producing auto components there. Toyota officials say, “The venture has been making textile machinery in India. But with

Leveraging the India Advantage Availability of technical manpower Availability of technical manpower is critical to Toyota’s strategy of manufacturing locally as opposed to imports. One of the key strengths Toyota sees in India is the availability of technical manpower from premier engineering, diploma and ITI institutions. In addition this, manpower comes at an attractive wage providing good return on investment. FORTUNE 500 COMPANIES IN INDIA

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the global automotive business expanding, we now intend to utilise this venture for also making low cost components in India to complement our transmission venture here”. Both plants are 100 per cent export oriented units, and reinforce Toyota’s commitment to developing India as a sourcing hub for auto components.

Future plans Toyota plans to increase its market share in the MUV and car markets, alongside increasing productivity. Toyota expects to grow 10 per cent per year in the future. Toyota will also plan to continue working with component manufacturers to help/guide them on quality, cost and delivery. Toyota plans to invest US$ 28.3 million to increase production capacity from 45,000 to 60,000.

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