1.1 Introduction of the company
Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi, Japan. In 2012, it was the largest automobile manufacturer. It is the world's first automobile manufacturer to produce more than 10 million vehicles per year. It was the largest listed company in Japan by market capitalization up to July 2014.
In 1937, Toyota Motor Corporation was founded by Kiichiro Toyoda, as a spinoff from his father's company, Toyota Industries to create automobiles. While still a department of Toyota Industries, it created its first product, the Type A engine in 1934. The Toyota AA is the first passenger car in 1936. Toyota brand, Hino, Ranz, Scion and Lexus are the vehicles’ brands that produce…show more content… It is a luxury product because it has high income elasticity of demand. Consumers with higher income can afford to buy Toyota Vios which cost around RM80,000, whereas consumers with low income could not afford it. They will choose to buy cars such as Proton Kancil that only cost around RM30,000 or use public transport that are much more cheaper. When consumers’ income increases, they will tend to buy more luxury goods. However, when their income decreases, they will buy less luxury goods. Therefore, Toyota Vios is a luxury product.
1.4 Complement and substitute
Complement goods are goods that must be use together or simultaneously. Two goods are consider complement if the increase in price of one good caused a decrease in demand of another good. Complement goods of Toyota Vios in the market is gasoline.
Gasoline is a transparent, petroleum-derived liquid that is used primarily as a fuel in internal combustion engines. Cars like Toyota Vios cannot function without using gasoline. Hence, if the price of gasoline increases, the purchasing power of consumer will decrease and this cause the demand of Toyota Vios decrease.
Substitute goods are goods that can satisfy consumer’s needs and desires that may replace other goods. There are some substitute goods that can be replaced Toyota Vios in the