1. S.K.PATEL INSTITUTE OF MANAGEMENT
AND COMPUTER STUDIES
PRESENTATION
ON
APPLICATION OF ECONOMICS
CONCEPTS ON
TOYOTA MOTOR CORPORATION
SUBMITTED TO
Prof. Sonu Gupta

2. GROUP NO 24
SUBMITTED BY
o Hiren Vaghela
o Viram Bharwad
o Nikhil Prajapati
o Hitesh Chaudhari
o Pankaj Kamaliya

3. FLOW OF THE PRESENTATION
Introduction
Principals
Economic model
The Circular Flow Diagram
Macro and Micro Analysis
Demand and Supply Analysis
Study on demand of Toyota motor
Elasticity and its application
Consumer surplus and producer surplus
Cost structure
Factor affecting price of toyota motor

4. PRINCIPLES

5. 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

6. •Rational People Think at Margin
Toyota main function is to sale car to customers.
Except this Toyota have its financial services and
museum and etc

7. Economic Models

8. First Model: The Circular Flow Diagram
CARS AND SERVICES
EXPENDUTIRE
services
CUSTOMERS TOYOTA
FACTOR OF PRODUCTION

9. MICRO
ANALYSIS

10.  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

11. Company Name Toyota Motor Corporation
President and
Representative Akio Toyoda
Director
1 Toyota-Cho, Toyota City,
Aichi Prefecture 471-8571,
Head Office
Japan
Phone: (0565) 28-2121
397.05 billion yen (as of March
Capital
31, 2011)
Shareholders Shareholder Composition
From April 1 to March 31 of the
Fiscal Year
following year
Motor Vehicle Production and
Main Business Activities
Sales
Business Sites Information on Business Sites
Number of employees 317,716 (as of March 31,
(consolidated) 2011)

12. 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.

13. 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.

14. 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

15. TOYOTA PRODUCTS

17. Economies of Scope
Economies of Scope
•CAR
MUV
SUV
•TRUCKS
COMMERCIAL
BIG TRUCKS
•FINANCIAL SERVICES
•Museum
•SPORT CARS
•FORMULA RACEING CARS

18. 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

19. 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.

20. MACRO
ANALYSIS

21. 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 crores
The per family use car ratio is 10:1
SUV 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%

22. TOYOTA WORLD’S LEADING AUTOMOBILE COMPANY
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 VOLKS 7,341,065 7,120,532 220,533
WAGEN

23. Region wise sales car in world

24. 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.

25. competitors

26. DEMAND
AND
SUPPLY ANALYSIS

27. Demand Curve

28. Shifts in the demand Curve
Price of
Toyota
cars
Increase
in demand
Decrease
in demand
Demand
curve, D 2
Demand
curve, D 1
Demand curve, D 3
0
Quantity of
Toyota motors

29. supply Curve
SUPPLY CURVE
Quantity of toyota motors

30. Shifts in the supply Curve
prices
8L
5 8 10
quantity

32. ELASTICITY
AND
APPLICATION

33. Elasticity of Demand
The Price Elasticity of Demand
% change in quantity damanded
% change in prices The price elasticity of
demand is the relation
1. D and i s t o be El ast i c.(p>1)
em between percentage
2. D and i s t o be
em change in quantity
I nel ast i c(p<1) demanded of the goods
3. D and i s t o be per f ect l y
em and percentage change
El ast i c in price goods
(p=i nf i ni t y)
4. D and i s t o be per f ect l y
em
I nel ast i c
(p=0)

34. The price elasticity of supply
% change in quantity supplied The pr i ce
% change in prices el ast i ci t y of
suppl y i s t he
1. Supply is to be Elastic.(p>1) r el at i on bet w een
2. Supply is to be Inelastic(p<1) per cent age
3. Supply is to be perfectly Elastic
(p=infinity)
change i n
4. Supply is to be perfectly Inelastic quant i t y
(p=0) suppl i ed of t he
5. Unit Elastic Supply(p=1)
goods and
per cent age
change i n pr i ce
goods

35. PRICE ELASTICITY
year Toyota Quantity TR %change % change in Elasticity Description
LIVA in price quantity
price
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

36. CONSUMER SURPLUS
AND
PRODUCER SURPLUS

37. 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
surplus
EXAMLPE:- 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.

38. 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
PRODUCER SURPLUS buying that product
Here point B will be producer surplus
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.

39. COST STRUCTURE
&
PRICING

40. Cost structure
Fixed Costs
Variable Costs:
Salary
Petrol and diesel expenses,
Electric expenses,
Advertisement expenses,
Stationary and various

41. Factors affecting Pricing OF TOYOTA
Internal Factors:
Internal Cost Structure
Marketing Strategy
External Factors:
Market conditions
Competitors pricing
Increase in various costs
Prices of various materials
Duties and taxes and many factors