Degree

Master of Business Administration

Faculty / School

School of Business Studies (SBS)

Advisor

Mr. Qashif Effendi Adjunct Faculty, Department of Marketing, Institute of Business Administration (IBA), Karachi

Project Coordinator (External)

Muhammad Imtiaz, Passenger Car Lead

Client

Indus Motor Company Limited

Committee Member 1

Ms. Rakhshanda Mustafa, Ms. Rakhshanda Mustafa, Project Reviewer, Department of Marketing, Institute of Business Administration (IBA), Karachi

Committee Member 2

Mr. Muhammad Imtiaz, Industry Partner, Passenger Car Lead, Indus Motor Company Limited

Project Type

MBA Research Project

Keywords

Toyota Corolla Cross, Hybrid Electric Vehicles, CSUV Segment, Consumer  Perception

Abstract / Summary

The project studies the strategic market positioning of Toyota Corolla Cross in rapidly evolving Compact Sports Utility Vehicle (CSUV) segment of Pakistan. The study focuses towards Indus Motor Company’s (IMC’s) real-life challenge to sustain relevance of Corolla Cross as a product in the midst of fuel prices fluctuations, increasing awareness for Hybrid Electric Vehicles (HEVs) as well as Electric Vehicles (EVs) along with aggressive competition faced from Chinese and South Korean manufacturers. Even though IMC has been at the centre of the automobile sector in Pakistan due to their strong brand equity, solid resale value, low maintenance costs and after-sales network, Corolla Cross faces a lot of pressure from growing competitors who are offering richer features in lower prices with a stronger technology-led positioning. One of the core problems identified was that IMC had not created a differentiated product perception in the minds of its consumers when it comes to Corolla Cross. The initial tagline of being the first locally assembled hybrid offering in Pakistan had little to no recall by consumers. Due to late entry of Toyota in this segment, consumers were quick to compare it with Kia Sportage, Hyundai Tucson, Haval H6, MG HS, Chery Tiggo and other emerging CSUV models from BYD, Changan, etc. Similarly, understanding of hybrid technology remains limited, while visibility of EVs and PHEVs is increasing due to government priorities in their policy and electrification trends globally. This opens up an opportunity for Toyota Corolla Cross to act as a transition technology between ICE vehicles and EVs, provided there is apt communication of its hybrid value proposition. The study intended to evaluate the perception of consumers on adoption of HEVs, the impact of trends on EVs adoption, impact of infrastructure and policy on consumer preferences, Toyota IMC’s marketing effectiveness and to analyse positioning of Corolla Cross positioning against within the ICE, HEV, PHEV and EV eco system in CSUV segment of Pakistan. A mixed-method approach was used where the quantitative part included a structured survey based on an extended Theory of Planned Behaviour model, which was filled by 82 respondents, and further analysed through SPSS and Smart PLS. The qualitative part included analysis of four in-depth interviews and one focus group discussion, thematic analysis of which was done by coding it on NVivo. The findings from both quantitative and qualitative part showed an approval towards electrified mobility. 84% of the respondents preferred switching to HEVs or EVs instead of ICE vehicles. Concern towards environment showed significant influence towards attitude, subjective norms, perceived behavioural control and personal moral norm, while attitude toward adoption of HEV and personal moral norm significantly influenced intention to adopt HEVs. Qualitative findings further indicated HEVs as the practical option for Pakistan as they offer fuel savings without the need of any charging infrastructure. Other adoption factors include solid resale value, fuel saving, low maintenance cost, after-sales service network and total cost of ownership. Although disruption from EVs was seen as inevitable, the mass market adoption seems to be delayed due to charging infrastructure unavailability, inconsistent policies, battery life and resale value concerns. Chinese and South Korean brands, like Haval, Changan, Hyundai, Kia and BYD are being perceived by consumers as strong disruptors due to the product offering with high technological features and value-for-money products. The analysis on competition indicates that Corolla Cross has strengths due to Toyota’s legacy, hybrid technology, after-sales network, maintenance and solid resale value. However, it still suffers from a price-to-value gap. The feedback from respondents as well as from online benchmarking indicated that Corolla Cross is perceived as far less feature-rich product than its competitors. Therefore, Corolla Cross is not being perceived as the most attractive or best value product in the CSUV segment. The report recommends a reposition of Corolla Cross as a smart and fuel-efficient HEV which is designed for Pakistan’s terrain. IMC should also focus on education campaigns to explain differences between technologies like ICE and HEV, while showing real life evidences of battery maintenance and total ownership cost due to fuel saving. Physical presence in roadshows, mall campaigns, along with digital presence on social media platforms through influencer marketing and fuel-saving comparisons are needed to improve awareness and increase confidence for adoption. In the short term, Corolla Cross Hybrid should remain as Toyota’s transitional technology between ICE vehicles and EVs. In the medium term, IMC should consider expanding hybrid offering across their portfolio from Sedans to full size SUVs. In the long term, IMC should introduce PHEV models along with roadmap for EV models once charging infrastructure is ready. While Corolla Cross has a strong potential, its success strongly depends on strong positioning and improved strategic communication for HEVs awareness.

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