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S.K.PATEL INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES
PRESENTATIONON
APPLICATION OF ECONOMICS CONCEPTS ON
TOYOTA MOTOR CORPORATION
SUBMITTED TO
Prof. Sonu Gupta
GROUP NO 24
SUBMITTED BY o Hiren Vaghelao Viram Bharwado Nikhil Prajapati o Hitesh Chaudhario Pankaj Kamaliya
FLOW OF THE PRESENTATION
Introduction PrincipalsEconomic model
The Circular Flow DiagramMacro and Micro Analysis
Demand and Supply AnalysisStudy on demand of Toyota motor
Elasticity and its applicationConsumer surplus and producer surplusCost structure Factor affecting price of toyota motor
PRINCIPLES
PRINCIPLES
•People Faces Trade off-
people has to decide whether to purchase car of Toyota
or other company. If it People purchase car of ford than
the option of purchase Toyota car will be a trade off for
customer or visa-versa.
LIVA FIGO
Toyota main function is to sale car to customers.
Except this Toyota have its financial services and
museum and etc
•Rational People Think at Margin
Economic Models
First Model: The Circular Flow Diagram
TOYOTACUSTOMERS
CARS AND SERVICES
FACTOR OF PRODUCTION
EXPENDUTIRE
services
MICRO ANALYSIS
COMPANY OVERVIEW
Established in 1937 out of Sakichi Toyoda’s weaving machine company
Launched first car (SA Model) in 1947 “Toyota Production System” formed in
1950 based on Just-In-Time principle Overseas production starts in 1959
(Brazil) In 1972, cumulative production >10M
units In 2002, entry in the Formula 1 circuit
Company Name Toyota Motor Corporation
President and RepresentativeDirector
Akio Toyoda
Head Office
1 Toyota-Cho, Toyota City, Aichi Prefecture 471-8571, JapanPhone: (0565) 28-2121
Capital397.05 billion yen (as of March 31, 2011)
Shareholders Shareholder Composition
Fiscal YearFrom April 1 to March 31 of the following year
Main Business ActivitiesMotor Vehicle Production and Sales
Business Sites Information on Business Sites
Number of employees (consolidated)
317,716 (as of March 31, 2011)
TOYOTA GLOBAL VISION
Toyota will lead the way to the future of mobility,
enriching lives around the world with the safest and most responsible ways of moving people.
Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile.
We will meet challenging goals by engaging the talent and passion of people, who believe there is always a better way.
TOYOTA GLOBAL MISION Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities
Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits while keeping ourselves open to new partnerships.
OBJECTIVe
Fuel efficient, low-cost vehicles, reliable and of high quality. Sales and after sales service, total automobile value and customer satisfaction. Increase competitive strength through
advanced technology Promoting a global perspective
Increase competitive strength through advanced technology Environmental technology fuel consumption, emission, recoverability Hybrid vehicles and next generation fuel cells
TOYOTA PRODUCTS
Economies of ScopeEconomies of Scope
•CAR MUV SUV•TRUCKS COMMERCIAL BIG TRUCKS
•FINANCIAL SERVICES
•Museum
•SPORT CARS
•FORMULA RACEING CARS
TOYOTA COMPANY IN WORLD
Manufacturing companies in Japan
Toyota Motor Kyushu, Inc. Toyota Motor Hokkaido, Inc. Toyota Auto Body Co., Ltd. Kanto Auto Works, Ltd. Toyota Industries Corporation Aichi Steel Corporation Toyoda Machine Works, Ltd. Toyoda Gosei Co., Ltd. Toyota Boshoku Corporation
Manufacturing companies overseas
Toyota Motor Manufacturing, Kentucky, Inc. Toyota Motor Manufacturing, Indiana, Inc. Toyota Motor Manufacturing Canada Inc. Toyota Motor Manufacturing (UK) Ltd. Toyota Motor Thailand Co., Limited Toyota Motor Corporation Australia Ltd.
Financial companies Toyota Finance Corporation Toyota Motor Credit Corporation etc.
Through these partnerships, TOYOTA implements diverse collaborations that complement each other and create synergies.
MACRO ANALYSIS
AUTO MOBILE Industry in world
The auto mobile industry in world total selling like 2009 61,791,868 12.4%
2010 77,857,705 26.0% Total automobile industry in India is 50000 cr.The industry can be divided into the SUV and the MUV small cars market. The SUV market at present is more than 50 lakh per annum valued at Rs. 300 croresThe per family use car ratio is 10:1SUV and MUV together constitute approximately 78% of the market..In 2008-09, in the branded car market, toyota held the number one spot, with a market share or 28%, followed by GM Walls at 24%, VW at 20% and OTHERE at 28%
NO
CARS GROUP Total LCV HCV HEAVY BUS
Total 77,743,862
60,343,756
13,370,432
3,510,681
518,993
1 TOYOTA 8,557,351 7,267,535 1,080,357 204,282 5,177
2 G.M. 8,476,192 6,266,959 2,197,629 1,175 10,429
3 VOLKSWAGEN
7,341,065 7,120,532 220,533
TOYOTA WORLD’S LEADING AUTOMOBILE COMPANY
Region wise sales car in world
Auto mobile INDUSTRY IN GUJARAT
The Rs 50000-Crore Indian Auto mobile markets.
Out of which, Gujarat contributes 25%
Stiff competitions in Gujarat
Major dip in car sales during festival.
Ahmadabad, the auto mobile hUB of India
After come TATA also come FORD,SUZUKI.
competitors
DEMAND AND
SUPPLY ANALYSIS
Demand Curve
Price ofToyota
cars
Quantity ofToyota motors
Increasein demand
Decreasein demand
Demand curve, D3
Demandcurve, D1
Demandcurve, D2
0
Shifts in the demand Curve
SUPPLY CURVE
supply Curve
Quantity of toyota motors
quantity
prices
8 L
5 810
Shifts in the supply Curve
ELASTICITY AND
APPLICATION
Elasticity of Demand
The Price Elasticity of Demand
% change in quantity damanded% change in prices
1. Demand is to be Elastic.(p>1)
2. Demand is to be Inelastic(p<1)
3. Demand is to be perfectly Elastic (p=infinity)
4. Demand is to be perfectly Inelastic
(p=0)5. Unit Elastic demand(p=1)
The price elasticity of demand is the relation between percentage change in quantity demanded of the goods and percentage change in price goods
The price elasticity of supply
The price elasticity of supply is the relation between percentage change in quantity supplied of the goods and percentage change in price goods
% change in quantity supplied% change in prices
1. Supply is to be Elastic.(p>1)2. Supply is to be Inelastic(p<1)3. Supply is to be perfectly Elastic
(p=infinity)4. Supply is to be perfectly Inelastic
(p=0)5. Unit Elastic Supply(p=1)
year Toyota
LIVA price
Quantity
TR %change in price
% change in quantity
Elasticity Description
2007 6lakhs 6 36 L 0 0 0 0
2008 5.5lakhs
8 44 L 8 25 3.1 Elastic
2009 5lakhs 9 45 L 9 11 1.2 Elastic
2010 4.80lakhs
9.5 45.6 L
4 5.25 .76 Inelastic
2011 4.5lakhs
10 45 L 7 5 .70 Inelastic
PRICE ELASTICITY
CONSUMER SURPLUS AND PRODUCER
SURPLUS
CONSUMER SURPLUS
When any person or organization order it in bulk quantity, they get benefits on price such like as 15% discount on price. So these consumers get benefits from company and this is consumer’s surplusEXAMLPE:- Any doctor give a order of car than any dealer give discount of 10% and extra 10,000 Rs so there will be a consumer’s surplus.
PRODUCER SURPLUS
PRODUCER SURPLUS
Consumers are ready to pay more price due to some of feature and On extreme product and organization sale product at higher price and consumer Will willingness to pay for buying that product
EXAMLPE:- TOYOTA sale CAMRY car to its consumers and the cost of car is 20 lakhs. The consumers pay for it 24 lakhs for purchase car than 4 lakhs is producers surplus.
Here point B will be producer surplus
COST STRUCTURE&
PRICING
Fixed Costs
Variable Costs:SalaryPetrol and diesel
expenses,Electric expenses,Advertisement
expenses,Stationary and
various
Cost structure
Factors affecting Pricing OF TOYOTA
Internal Factors:Internal Cost StructureMarketing Strategy
External Factors:Market conditionsCompetitors pricingIncrease in various costsPrices of various materialsDuties and taxes and many factors