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What Is Toyota's Business Model?

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UWM Toyota Motor is able to capture a wider market including entry level (Perodua), mid-market (Toyota) and high-end market (Lexus). Toyota has design a variety models according to the customer’s needs. Market segmentation is dividing a market into smaller defined groups with different needs, characteristics or behaviours (Kotler & Keller, 2012) who might require separate products or marketing mixes. Toyota’s models can be segmented into 4 different categories: Passenger vehicles, Multi-purpose vehicles (MPVs), Four Wheels Drive (4WD) and Hybrids. Each of the category is designed to target a specific market.

Passenger vehicles consists of Vios, Altis and Camry in Malaysia market. All the 3 models under passenger vehicles target the middle-and-high
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UMW Toyota provides a broad range of different prices for middle-and-high income customers. The main target customers for Avanza and Vios are middle income customers whereby the selling price of the vehicle is within the range of RM70,000. The main target customers for more luxurious vehicle such as Camry and Fortuner is high income earners of which the vehicle cost within the range of RM140,000 to RM170,000.

Toyota brand is facing very stiff competition in pricing amongst local brand vehicles such as Perodua under UMW Toyota Motor Sdn. Bhd. and Proton. In Malaysia, there is no import duties and lacal taxes being imposed for local car makers such as Perodua and Proton. Hence, non-National car is unable to compete with local brand in terms of pricing and unable to penetrate entry-level target market. Perodua currently is having 29.9% market share while Proton’s market share is 21.2% in Malaysia. These 2 local brands is occupying half of the Malaysia’s
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Honda has a strong reputation of their vehicle engines as top-notch quality. Honda’s competitive strategies is product differentiation whereby they spend heavily in research and developmet in order to create unique products. Honda able to achieve competitive advantage through various technologies, such as Honda Smart Ecological Paint (Honda S.E. Paint), Intelligent Dual Clutch Drive system and 3D crash-simulation visualization technology (Honda, 2014). Honda S.E. Paint process is a new painting technology will reduce 40% time saving for painting and 40% reduction in CO2 emission to the environment. Honda discovered one-motor hybrid system for small-sized vehicles through the intelligent dual clutch drive
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