Chapter I

INTRODUCTION

Toyota primarily conducts business in the automotive industry. Toyota also

conducts business in finance and other industries. Toyota’s business segments

are automotive operations, financial services operations and all other operations.

Toyota’s automotive operations include the design, manufacture, assembly and

sale of passenger’s cars, minivans and commercial vehicles such as trucks and

related parts and accessories. Toyota’s financial services business consists

primarily of providing financing to dealers and their customers for the purchase or

lease of Toyota vehicles. Toyota sell its vehicles in approximately 170 countries

and regions. Toyota’s primary market for its automobiles are Japan, North

America, Europe and Asia.

Known for its reliability, safety features, availability of parts, and exemplary

service offerings, Toyota cars have been a staple choice for Filipino car buyers.

Toyota Motor Philippines also has its own financing services that cater to the

financial needs of any Filipino who wants to own a Toyota. In addition, the relatively

high resale value of used or pre-owned Toyota cars has been a factor that makes

its cars attractive to many car buyers.

Proximity, one of the concerns for TGS is the farthest dealership in the south

from its distributor which is the Toyota Motor Philippines located in Sta. Rosa,

Laguna. Aside from proximity, the congestion due to 50,000 square meter dealer

facility became the problem. This facility is located at National Highway, City

Heights, General Santos City, it consists of a Showroom for the Vehicle display

and a lounge for the Vehicle sales customers and it also serves as reception for
 2

Body and Paint Service Transactions and Insurance representatives located also

the Parts and Accessories counter. Service Reception for the service customers

for General Services and Periodic Maintenance, a pantry and the cashier. Lastly,

back offices for the support group, a warehouse for the genuine Parts and

Accessories, a Service Bays with state of the art equipment.

To solve the congestion concern, the dealership expand its operation and

open a Service Center solely for Body and Paint operations located at the National

Highway, Silway 7, Polomolok , South Cotabato. It is called the Metro Gensan

Body and Paint Center. It can cater 240 vehicle for stockyard with 54 productive

bays. Also for expansion, a caravan sites are present in the area of Koronadal and

Sultan Kudarat.

In 2014, Toyota reached a record breaking number of sales as it sold more

than 106,000 vehicles in 2014 alone, showing a 41% increase of sales over 2013.

This number proved to be a milestone since the company didn’t expect to reach it

until 2018. Because of this, TMP gained entry into the prestigious group of Toyota

Manufacturers worldwide to reach more than a hundred thousand sales.

Today, Toyota has 46 dealerships spread all over the country. It has won

numerous awards and acclamation not only nationally but internationally,

cementing its status as a brand Filipinos know and trust (Marian, 2015).
 3

Chapter II

THE COMPANY

This chapter discusses the History of the company, company profile, nature

of the business, product and services, suppliers, target market, vision, mission,

and organizational structure.

History

In 1925, a man named Sakichi Toyoda invented the Toyoda Model G

Automatic Loom. Five years later, the patent for the loom was sold to a British

company, generating the money needed to fuel the automobile development. It

began as a division of Toyoda Automatic looms and became a solo company in

1937. It was under the watchful eye of Sakichi’s son Kiichiro Toyoda that the

company focused and bloomed in the automobile production business. The first

vehicles produced off the new automotive company were released in 1935. These

are the A1 Passenger car and the G1. Since then they have not stopped

producing great automobiles that would suit the different needs of the masses.

On August 3, 1988, Toyota Motor Philippines (TMP) was incorporated. It is

GT Capital Holdings, Inc., Toyota Motor Corporation and Mitsui & Co. Ltd. It is the

joint venture between three prestigious companies: GT Capital Holdings, Inc.,

Toyota Motor Corporation and Mitsui & Co. Ltd. A historical moment for the

company and the country had happened: Toyota Motor Philippines was finally

formally established in the Philippines. Along with its descent on the Pearl of The

Orient, Toyota brought along with it the hope for numerous job opportunities for

Filipinos and the removal of the need to purchase a Toyota vehicle abroad.
 4

On February 27th, it opened its first two dealerships in the Philippines,

which are Toyota Bel-Air Incorporated and Toyota Quezon Avenue and on April

7th, it opened Toyota Shaw. Later in the year on September 15th, people from

Southern Metro Manila need not go to the north anymore to purchase their vehicle

as Toyota opened its first dealership in the south of Metro Manila, Toyota Alabang.

The year 1990 was a big one for Toyota Motor Corporation. It opened two

new dealerships in Quezon City and opened the first dealership outside of Metro

Manila: Toyota Cebu. It was this year that Toyota Motor Philippines Foundation

Inc. was established. This institution aims to serve the community with its

educational, health, environmental and community service projects. This year also

marked the groundbreaking of the 78-hectare Toyota Santa Rosa Industrial

Complex. The Toyota Santa Rosa Industrial Complex opened and started

operations. It currently manufactures Innova and Vios. The National Government

declared the complex a Special Economic zone. TMP was awarded an ISO14001

certificate for environmental management, becoming the first automotive

manufacturer in the Philippines to do so. It was another remarkable year for TMP

as it finally launched the first Lexus dealership in the Philippines, marking another

milestone in the automobile manufacturer’s string of successes in the Philippines.

It was also this year that the Chamber of Automotive Manufacturers of the

Philippines Inc. (CAMPi) awarded Toyota Motor Philippines Corporation (TMP) the

Triple Crown award, which is comprised of Number one in Passenger Car Sales,

Number One in Commercial Vehicles Sales and Number one in Overseas Sales,

for the thirteenth year in a row.

 5

May 2, 2008 when Toyota General Santos, Inc. became a full pledge

dealership under the Toyota Davao Group’s President Mr. Jose Lim III (Olog,

2018).

Company Profile

Toyota General Santos, Inc. (TGS) inaugurated last May 2, 2018 and

started with a total of 60 team members. The organization is headed by the Toyota

Davao Group president, Mr. Jose F. Lim III. TGS is under the group of Toyota

Davao which consists of 5 dealerships. Toyota Davao City, Toyota General

Santos, Inc., Toyota Tagum City, Toyota Matina Davao, and Toyota Kidapawan

City. Technically, only Toyota Kidapawan City is the sister dealer of TGS.

TGS is the sole dealership in the Region XII which is the primary market

area (PMA) of the dealer, however, just recently, Toyota Kidapawan City opens

and the PMA were shared.

The main product of the dealer is the Vehicles. The average annual sales

growth from the time it operated is at 22.6%. Most of the vehicles sold are the

Hiace, Hilux and Fortuner with a total of 61% of the total releases. Most of the

customer preferred financing with agribusiness as well as transportation related

business.

Aside from the Sales operation and as part a 5 star full pledge dealership,

TGS offered after-sales service. As the operation started, the average annual

growth of the Unit-in-Operation of the dealer reached to 41.6%. This means that

the dealer penetrates its Primary Market Area. In Service department, it is very

important to build a life-long rapport with the customers, with this, the service
 6

rendered must be in its finest. To deliver properly, Service ensures that only skilled

and well trained technicians handled the vehicles. Aside from that, all services

offered are certified by Toyota Motor Corporation and audited in a quarterly basis.

TGS also offered genuine Parts and Accessories. To properly manage the

inventory and as part of Toyota, the dealer only order what is needed in the

operation and as per demand or the Just-in-time principle maintaining the stock

month of 0.93.

The dealer also gauges success by how the customer is satisfied with the

product and service offered by an internal survey process done every after

purchase and service availed. With this, concerns are filtered before it elevates.

Currently, dealer consists of 220 team members, with 6 sections or department.

Office of the President with 1 team member, Vehicle Sales Department with 52

team members, Service Department with 110 team members, General Parts

department with 10 team members, Finance and Administration with 42 team

members and lastly the Customer Relations Department with 5 team members

(Olog, 2018).

Nature of the Business

Toyota General Santos, Inc. is a 5-star franchise dealer. Which means that,

TGS is authorized to sell vehicles under Toyota (brand) through Toyota Motor

Philippines, TGS also have after-sales services which offers Preventive

Maintenance of the vehicle done ever after 3 months or every additional 5,000 KM

mileage, aside from that it also caters General Service which includes all possible

job for the engine, chassis, and wirings, TGS also have a facility for Body and Paint
 7

repair for the vehicle with collision damages and light body or paint damages, lastly

the selling of Genuine Parts and Accessories. All services are supplied and

certified with Toyota Standards (Olog, 2018).

Product and Services

Toyota General Santos, Inc. offered various types of Toyota vehicle, from a

hatchback to SUVs, which are the most highlighted products that starts the cycle

of the dealership’s business. Aside from selling cars, it also offers an after-sales

service. After-sales offers genuine car parts, accessories and chemicals. It also

offers services for preventive maintenance, general services and body and paint

restorations (Olog, 2018).

Suppliers

Toyota General Santos Inc. products are supplied by the Toyota Motor

Philippines (TMP), TMP also certify services that being offered prior to the

execution of the services. These also applied to other dealers in the Philippines

(Olog, 2018).

Target Market

The primary market is the middle class level in the society for it’s one of the

biggest among the classes. For Toyota General Santos’ case, the majority of the

customers are the agricultural related one.

The second market is the upper-class rank for those are the ones who can afford

the luxury vehicles and the upper class grade vehicle (Olog, 2018).
 8

Vision

To be the No.1 automotive company where great people work as a team to

provide the best products and service to our customers.

Mission

Driven by the will to serve, we, hereby, commit ourselves:

• To dominate our markets through dynamic selling and timely delivery of

attractive products, with excellent customer service and continuous product

improvement.

• To produce vehicles and components of outstanding quality, using

advanced technology, continuously improving methods and environment-friendly

processes while maintaining safe working conditions.

• To sustain Company profitability, stability, productivity, and growth by

efficiently engaging in effective financial and resource management for the

collective gain of the Toyota Family and the society we serve.

• To sustain Team Members’ morale and productivity by developing their

full potential and total well-being, and by establishing mutual trust, mutual

responsibility and harmony through open communication.

 9

Organizational Structure

JOSE A. LIM III

PRESIDENT

JOSE F. LIM IV
EVP-GENERAL MANAGER

FEBE MARIE RYAN NIE K. MICHELLE JOHN BRYAN JOBERT

OLOG PUNGAY ANN SOLIZA ABELARDE
VAILOCES
SERVICE VEHICLE FINANCE CUSTOM
SALES PARTS
MANAGER MANAGER RELATION
MANAGER MANAGER
*94 team
members
*110 TEAM *52 TEAM *10 TEAM *42 TEAM *5 TEAM
MEMBERS MEMBERS MEMBERS MEMBERS MEMBERS

Figure 1. Organizational Structure

 10

Chapter III

CAPACITY OF THE INDUSTRY

This chapter presents the capacity of the industry, swot analysis and the

porters (5) five forces analsysis.

Capacity of the Industry

General Santos City is a fast-growing city and venturing into a car

dealership business is a good choice since the population of General Santos City

is increasing and of the industrialization, there for they would a lot of car dealers

here in General Santos City to cater all the demands of the population.

SWOT Analysis

This analysis shows the strengths, weaknesses, opportunities, and threats

of Toyota General Santos, Inc.

Strengths

-Toyota’s strong brand name. Sole dealership in the area.

-Body and Paint Facility has 54 bays with a stockyard capacity of 250 to

300 brand new vehicle

-Aggressive marketing strategies (Internal & TMP initiated)

Inter-company trainings

Weaknesses

-Congestion in the dealership

-Skill level of technical personnel and front liners

-Delivery lead time of Vehicle and Parts from TMP to Dealer (15-20 days)

-TIP does not follow the 50,000 below outright approval causing delays in

production. Will create customer concern

 11

-High inventory of New Vehicles – 286 units

-Connectivity and connection

Opportunities

-Rising of the international Airport located in Cotabato City

-Opening of Universities in General Santos City and Polomolok

-Opening of one of the biggest mall in Mindanao in Cotabato City (KCC)

-Partnered with TFS to give focus in financing Teachers, AFP and PNP

enlisted personnel

Threats

-Opening of the new car dealership brands in Region XII operated by

Autohub Group. (Mazda & Nissan)

-Adverse effects of TRAIN Law in the automotive industry

-Some banks disapproves customers from central Mindanao

-High interest Rates of Banks

Porters Five (5) Forces Analysis

This five (5) forces analysis of Toyota identifies the intensities or strengths

of the external factors in the automotive industry environment.

Rivalry of Competitors

 High aggresiveness of firms (strong force)

 High variety and differentiation of firms (strong force)

 Low number of large firms (moderate force)

Toyota General Santos’ competitive rivalry or competition is strong. Automotive

firms are aggressive against each other in terms of such factors as innovation and
 12

marketing. Also, Toyota competes with a high variety of firms, which differentiate

through cost, electronics, fuel efficiency, style, brand image and other variables.

Power of Buyers

 Low switching costs (strong force)

 High quality of information (strong force)

 Substitute availability (moderate force)

The bargaining power of buyers or customers is strong. The low switching costs

mean that customers can easily change from Toyota to competing firms at no extra

costs. In addition, Toyota’s customers can easily choose their best option because

of the accessibility of accurate product information. The combined effect of this

external forces is the strong force of customers.

Power of Suppliers

 Moderate population of suppliers (moderate force)

 High overall supply (weak force)

 Low forward integration of suppliers (weak force)

The bargaining power of suppliers is weak. The limited population of suppliers

around the world creates a moderate force that influeneces Toyota. Theoritically,

this bargaining power is high if the suppliers are fewer. However, the highy

availability of supply used for manufacturing Toyota’s products weakens supplier’s

power.

Threat of Substitutes

 Low switching costs (strong force)

 Moderate availability of substitutes (moderate force)

 13

 Low convenience in using substitutes (weak force)

Toyota General Santos’ threat of substitutes or substitution is moderate. In

most cases, it is relatively easy for customers to shift from Toyota to substitutes.

These substitutes to Toyota products include public transportation, bicycles, and

oter modes of transportation. However, these substitutes are only moderatley

available. In this part, such external factors create moderate threat of substitution

that toyota must address by making its products more accessible, affoprdable and

convenient.

Threat of New Entrants or New Entry

 High capital costs (weal force)

 High cost of brand development (weak force)

 High suply chain costs (weak force)

Toyota faces the weak threat of new entry. The high costs of establishing,

maintaining and growing a new firm in the industry are significant entry barriers.

These barriers weakens the effects of new entrants on companies like Toyota.

Thus, this part of Five Forces analysis shows that the threat of new entrants is

among the least of Toyota’s concerns in growing its business and maintaning its

positions as one of the top automonbile manufacturers in the world.

 14

Chapter IV

TECHNICAL PLANNING

This chapter presents the detail and information about the company. This

chapter includes the required input which is the building, equipment, work/services

flow, inventory management and waste disposal.

Required Input

This section presents the required input which includes the building,

equipment needed in the operation of TGS.

Building

Toyota General Santos is located at National Highway, Barangay City

Heights, General Santos City. It has a lounge for the vehicle sales customers and

it also serves as reception for body and paint service transactions and Insurance

representatives located also the parts and accessories counter. service reception

for the service customers for general services and periodic maintenance, a pantry

and the cashier. Lastly, back offices for the support group, a warehouse for the

genuine parts and accessories.

Equipment

Toyota General Santos has a service bays with state of the art equipment

a building that composes of a showroom for the vehicle display, a service buys

with lifters, with hydraulic tools and equipment.

 15

Work/Services Flow

Toyota General Santos work or services flow shows below. It includes the

Vehicle sales release process, service process, general parts process and lastly,

vehicle purchase from distributor.

1.1 Vehicle Sales Release Process

*Approval
*Vehicle Preparation
*Document Routing

1.2 Service Process

*Appointment
*Reception
*Production
*Delivery

1.3 General Parts Process

*Sending of Oder to TMP
*Prepare Order
*Pick and Ship Order

1.4 Vehicle Purchase from Distributor

*Monthly Order Sending to TMP
*Sends Order to Manufacturing
*Invoice and Ship Orders
*Receive and Transfer Order to
Stockyard

Figure 2. Work/ Services Flow

 16

Inventory Management

Toyota General Santos does first in, first out of inventory. Toyota General

Santos also practice the Just-In-Time principle which makes sure that only needed

product is delivered on time. These helps to lessen cost by eliminating

unnecessary in the process.

Waste Disposal

Toyota General Santos does its waste disposal in accordance with the given

provisions of City Government of General Santos. For water, filtering must be done

before entering the main sewer. And as for the hazardous wastes, Toyota General

Santos treat them before throwing it in the dumpsites.

 17

Chapter V

FINDING AND RECOMMENDATIONS

Toyota faces intense competition from automotive manufacturers in the

markets in which it operates. Factors affecting competition include product quality

and features, safety, reliability, fuel economy, the amount of time required for

innovation and development, pricing, customer service and financing terms.

Toyota’s future success depends on its ability to offer new, innovative and

competitively priced products that meet customer demand on a timely basis.

Therefore, we opt to recommend that Toyota should pursue the development of

environmentally conscious, energy saving products while incorporating functions

and services demanded by customers (value chain) and delivering them to global

market. Toyota also should aim to support industries and social infrastructures

around the world by continuously supplying products and services that anticipates

customers’ need in order to contribute to a compassionate society.