Internationalisation of Toyota.

Topics: Automotive industry, General Motors, Toyota Pages: 9 (2379 words) Published: February 1, 2006
1. INTRODUCTION

Toyota is Japan's biggest car company and the second largest in the world after General Motors. It produces around eight million vehicles per year, about a million fewer than the number produced by General Motors. Toyota markets vehicles in over 160 countries. The company dominates the market in Japan, with about 45% of all new cars registered in 2004 being Toyotas. Toyota also has entered in the uropean and North American market . It has significant market shares in several fast-growing south-east Asian countries.

Toyota has factories all over the world, manufacturing or assembling vehicles for local markets, including its most popular model, the Corolla. Toyota has manufacturing or assembly plants in the United States, Australia, Canada, Indonesia, Poland, South Africa, Turkey, the United Kingdom, France, Brazil, and more recently India and Argentina. Toyota New Zealand assembled vehicles until 1998, when it switched to importing cars from Japan and Australia. Cars from these plants are often exported to other countries. For example, the South African-built Toyota Corolla is exported to Australia, while the Australian-built Camry is exported (in left hand drive) to countries in the Middle East. Between 1997 and 2000, the number one selling car in the U.S. was the Toyota Camry. It was dethroned in 2001 by the Honda Accord, only to regain its place in 2002, with the introduction of a redesigned model.

2. EXPANSION OF THE JAPANESE AUTOMOBILE INDUSTRY

Japan's automobile export was the centre of trade resistance with the US and the European Community in the 1980s. That was partly because Japanese manufacturers tried to reduce the conflict that they began local production. Foreign direct investment to facilitate the local production had other virtues as well: for the Japanese manufacturers it enabled them to avoid the risk of exchange rate fluctuation and to respond more directly to the needs of local markets. For the host region of the investment, it meant not only the creation of job, but also eventual transfer of certain technologies via sub-contracting that raised the productivity of the local firms.

In addition to overseas production, which is part of the response to market globalization by the Japanese automobile sector, the production system they adopted also has a significant implication to the globalization of the industry. That is, Japanese manufacturers led departure from Fordism mass production system to post-Fordism in order to respond to more variable and flexible demands, which introduced organisational innovations. One way to express such post-Fordism is the lean production system, which began to replace the Fordism mass-production system even in the United States . Lean production , according to Womack, Jones and Roos, is not the only feature of Japanese industry, but they present it as a group of universal ideas applicable anywhere by anyone. Mass-production system of Fordism had an important socio-political implication , whereas post-Fordism is also bringing change in the social environment, such as a different style of industrial relations. The spread lean production to the US manufacturers indicates the change of commitment-rules, in which sense the production system originated from some Japanese firms conveyed a certain globalization effect. In short, the Japanese automobile manufacturers (or at least some of them) were leaders in globalization, adjusting their system to market globalization.

The Competitive advantages derived from the lean system spread in various areas of the automobile sector: designing of a new model, the entire manufacturing process, the distribution to end users, and even financing. Most important case is Toyota, like Ford before World War II; Toyota is not dependent on external finance.

3. PROCESS OF INTERNATIONALISATION

3.1. The beginning

The important demand for fuel-efficient in the 1970s provided Japanese manufacturers with...

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