Toyota in China

Topics: Automotive industry, Automobile, General Motors, Volkswagen Group / Pages: 14 (3320 words) / Published: Mar 2nd, 2013
AMRITA SCHOOL OF BUSINESS, AMRITAPURI

TOYOTA (TOYOTA MOTOR CO. AND ITS SUPPLIERS) IN CHINA

INTERNATIONAL BUSINESS PROJECT

INTRODUCTION

The Chinese automobile sector is one of the key sectors which was benefited by the policy reforms that started in 1987 in China. This industry has posted double digit growth rates in the past two decades and is promising to sustain that growth rate in the future also. According to Hua Wang (Policy Reforms and Foreign Direct Investment:
The Case of the Chinese Automobile Industry, the journal of Economics and Business, Volume VI-2007), Until the mid-1990s, the auto industry was highly protected in China. When the government officially announced its "Industrial Policy for the Automobile
Industry" in July 1994, it showed its intention to develop China 's highly protected automobile industry. According to the journal, this approach was modelled on that of
Korean industrial development in the 1970s.The requirements for funds, technology, to upgrade the automobile industry, forced the authorities to attract foreign direct investment (FDI). However, the operations of the foreign companies were limited by several limitation measures, the most important of which were high tariff and non-tariff barriers, screening, foreign equity limits, and local content requirements.

After 1992 almost 200 of the world’s 500 largest transnational companies had started operations in China being attracted by multiple benefits like low cost of operations, availability of cheap and skilled and technical labour etc. This interested the Japanese firm Toyota, which was targeting to capture as much market share around the world as possible. Toyota an iconic car maker founded in 1937 was known for its innovations, quality and global competiveness. The company manufactured vehicles at 53 production sites in 27 countries around the globe. In the fiscal year 2008, Toyota sold approximately 8.91 million vehicles in 170 countries. Delivering quality



References: ( All journals and articles are EBSCO material) 1. Hua Wang (Policy Reforms and Foreign Direct Investment: The Case of the Chinese Automobile Industry, the journal of Economics and Business, Volume VI-2007). 2. Haiyan Deng, Market structure and pricing strategy of china’s automobile industry, JOURNAL OF INDUSTRIAL ECONOMICS 0022-1821 ,Volume LVIII December 2010). 3. Zhou Gang ,China’s Economic Developmentand Environment Protection. 4. F. Hatani, , Pre-clusterization in emerging markets: the Toyota group’s entry process in China ,Asia Pacific Business Review ,Vol. 15, No. 3, July 2009. 5.Macro accessibility of China. 6.News articles from EBSCO database.

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