Toyota and Its Mode of Entry
1. Introduction
Toyota Motor Corporation was established in 1937. The company operates both automotive, under the brand Toyota, Lexus, Hino and Daihatsu, and non-automotive and can be seen as one of the best known automobile manufacturers. According to Japan Corporate News network, in 2007, the firm sold over 8.5 million vehicles in more than 170 countries. Based on Toyota Motor Global site , the major Consolidated Subsidiaries of Toyota Corporation across the world mainly locates in North America, Latin America, Europe, and Asia/Oceania. Furthermore, vehicle sales of Toyota can be broken down as 26.7% in Japan, 34.5% in North America, 14.4% in Europe, 9.2% in Asia and 15.2% in other regions . Toyota aims at localisation and collaborates with automobile companies in foreign countries in order to be the leadership in automobile market.
The consequential impacts on the firm and host countries vary according to different modes of entry. In order to identify why Toyota uses different entry modes in each part of the world, four countries, which are the United States, China, Brazil and Thailand will be used as case studies. This is because these countries are the main production bases and have potential markets.
2. Toyota in the US
Toyota began to export passenger cars to the US Toyota Motor Sales (TMS) in 1957 and adjusted their products to suit US consumer needs by increasing engine size and testing on the US highways. At that time, it was challenging for Toyota because there were three prominent dealers in the US market which were GM, Ford, and Chrysler. The ‘Big three’ held 95% of automobile market share. More importantly, Toyota faced a major problem in export because of the Voluntary Export Restraint Agreement which limited the export from Japan to the US.
However, using FDI measures to solve this problem, Toyota opened manufacturing operations by establishing five assembly factories, which created jobs for local people. In 1968, Toyota had a first
Toyota Motor Corporation was established in 1937. The company operates both automotive, under the brand Toyota, Lexus, Hino and Daihatsu, and non-automotive and can be seen as one of the best known automobile manufacturers. According to Japan Corporate News network, in 2007, the firm sold over 8.5 million vehicles in more than 170 countries. Based on Toyota Motor Global site , the major Consolidated Subsidiaries of Toyota Corporation across the world mainly locates in North America, Latin America, Europe, and Asia/Oceania. Furthermore, vehicle sales of Toyota can be broken down as 26.7% in Japan, 34.5% in North America, 14.4% in Europe, 9.2% in Asia and 15.2% in other regions . Toyota aims at localisation and collaborates with automobile companies in foreign countries in order to be the leadership in automobile market.
The consequential impacts on the firm and host countries vary according to different modes of entry. In order to identify why Toyota uses different entry modes in each part of the world, four countries, which are the United States, China, Brazil and Thailand will be used as case studies. This is because these countries are the main production bases and have potential markets.
2. Toyota in the US
Toyota began to export passenger cars to the US Toyota Motor Sales (TMS) in 1957 and adjusted their products to suit US consumer needs by increasing engine size and testing on the US highways. At that time, it was challenging for Toyota because there were three prominent dealers in the US market which were GM, Ford, and Chrysler. The ‘Big three’ held 95% of automobile market share. More importantly, Toyota faced a major problem in export because of the Voluntary Export Restraint Agreement which limited the export from Japan to the US.
However, using FDI measures to solve this problem, Toyota opened manufacturing operations by establishing five assembly factories, which created jobs for local people. In 1968, Toyota had a first
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