Q3: If you were Mr. Shuhei, how would you categorize your problems and solutions? What was as short-term and what was a long-term problem?
Standing as Mr. shuhei’s point of view, I would like to concentrate on the overall manufacture framework, which was how Toyota was running its oversea business in the historical strategy chosen and market response in the following fiscal year. Toyota has two main largest oversea markets, North America and Europe.
At first, I want to focus on comparing the two main oversea markets. For the North America, Toyota had more than 60% of entire sales were manufactured locally. Unlike North America, over 75% of the overall sales in Europe are imported from Japan, which can be treated as the long-term problem. For example, for economic aspect, if Toyota could establish the production line in Euro-based country, it may help them to reduce the cost such as: tariff and transportation cost. Additionally, for international industry trend, the whole global environment requires those manufactory industries to make an industrial structure consolidation to satisfy the different market requirement such as designing more suitable production for different regions.
Secondly, the main short-term problem can be result from the Euro continued downturn since 1999. During that period of time, the Euro against Japanese Yen leads to a big disaster for Toyota’s overall profit. To eliminate the continued loss, Toyota had introduced and designed a new product model Yaris for European market and it created an excellent sales record in that year. However, the final figures of the profit did not reach their expectation that they made before as the reason of the instability of the exchange rate.
The long-term solution for the company could consider gradual move the manufacturing line to a European country which use euro as a basic currency, but according the effect of phase response to make sure the production effectiveness. The short-term solution...
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