Toyota: How trade barriers can affect the firm's strategy in terms of marketing operations

Résumé du document

Automotive industry is recognized as one of the most global of all industries. "On a global level, the assets of the top ten multinational automotive enterprises represent 28% of the assets of the world's top 50 companies, 29% of their employment and 30% of their total sales.

In 1999, four of the world's ten largest companies were in the automotive sector: General Motors (no 4), Ford (no 5), Toyota (no 6) and Daimler Chrysler (no 7). Several other European based companies can be found within the top 100 companies: Volkswagen (no 12), BMW (no 20), Renault (no 28), Peugeot (no 49), Fiat (no 51) and Volvo (no 88) (European Foundation for the Improvement of Living and Working Conditions, Sector futures, and the automotive sector at a crossroads).

In the middle of the 20th century, there were more than a hundred automotive producers. In the decades since, continuing consolidation of both producers and major suppliers due to overcapacity has led to the creation of major groups. Over the last 20 years, multinational groups have emerged such as Daimler-Benz, Chrysler and Mitsubishi; Ford, Volvo, Mazda
and Rover; Nissan and Renault; and General Motors, Fiat and Saab.

"In 1995, 1.2 million people were employed in manufacturing and assembling vehicles and over half a million in making parts. If the jobs in related industries are included, over 12 million EU citizens are employed in the automotive industry" (European Foundation for the Improvement of Living and Working Conditions, Sector futures, and the automotive sector at a crossroads). But, since the 1970s and 1980s, the native European automotive industry, and particularly, that of the United Kingdom, is declining, because of foreign direct investment by companies such as Toyota, Nissan, and General Motors. In 2005, production of cars was 66.5 million, 2 million more than in 2004. The market is dominated by a few numbers of companies that are known all around the world. General Motors is the first car manufacturer in terms of production (more than 9 million vehicles in 2005) before Toyota (more than 7.3 million) and Ford (almost 6.5 million). In the EU, Volkswagen, Ford (Volvo), PSA Peugeot Citroen, General Motors and Renault are the biggest players in the manufacture of passenger cars.

Extraits

[...] Indeed, in June 2006, “Toyota has a total of 52 overseas manufacturing companies in 27 countries / regions. Toyota markets vehicles in more than 170 countries / regions” (Toyota up close, August 2006). The firm has 8 manufacturing plants in Europe and its design center is located in France. Toyota took its very first steps Source : www.toyota.com into the European market in the early 1960s. Today, the firm employs approximately 55,000 people in Europe. In 2005, it has built 638,000 vehicles and sold 964,000 on this market. [...]

[...] Another trade barrier is a non-tariff barrier. These are administrative regulations that discriminate against foreign goods. These barriers can affect Toyota by delaying imports at the frontier, a home goods bias in purchases for the government and contracts that specify standards with which domestic producers are familiar but foreign producers are not. Another barrier to trade includes voluntary export restraints. This is a limit that has been imposed on exporting by a country. So there has also been a limit put on the amount of goods or automobiles that can be imported in a financial year. [...]

[...] Meanwhile, it provided Toyota priceless experience in dealing with foreign affairs and avoids the voluntary import restrictions in United States. The capacity of NUMMI could produce about 250,000 vehicles per year. The success of NUMMI encouraged Toyota to set up overseas plants. In 1985, Toyota established an auto plant in Georgetown, US. The capacity of the new plant could produce approximately 200,000. However, it produced about 220,000 vehicles in the early part of 1990. The management group of Toyota has recognised that they can get benefits from overseas plants. [...]

[...] Finally, it is important to say that, in its activity, Toyota attempts to take into account the environmental concerns as well as the requirements in constant evolution for the drivers and the European society as a whole picture / 12 Understanding Global Markets - TOYOTA B. Analysis of trade barriers pertaining to industry around the world The world wide automobile market is very highly competitive. Toyota faces strong competition from automobile manufactures in respective markets in which it operates. Toyotas ability to maintain its competitiveness will be fundamental to its future success in existing and entering new markets and its market share. [...]

[...] In 2010, China should be the first world market. Moreover, it is difficult to evaluate the number of cars manufacturers, but China would count more than 80 cars manufacturers. According to the Chinese Trade Ministry, it would be 160 companies specialized in the construction of cars and the manufacture of spare parts that could choose export card. The tendency indicators envisage for cars exports. In 2010, it could be of 2 million. To liken with Europe million people are employed in automotive industry in China. [...]