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Internationalisation Of Toyota Essay

2699 words - 11 pages

1. INTRODUCTIONToyota 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 ...view middle of the document...

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 INTERNATIONALISATION3.1. The beginningThe important demand for fuel-efficient in the 1970s provided Japanese manufacturers with opportunities to establish a global internationalization strategy which were based on local production in export market countries, transcending the framework of exports from Japan.Joint ventures with foreign manufacturers marked the beginning of this new approach. At the time, the U.S. manufacturers General Motors and Ford were beginning to promote their cars plans aimed at producing small passenger cars on a global scale to meet the rising demand for these cars.As part of this strategy, Isuzu and Suzuki entered into international manufacturing tie-ups with GM; Toyota established a joint venture company, New United Motor Manufacturing Inc. (NUMMI), with GM in the United States; and Ford expanded and reinforced its ties with Toyo Kogyo (now Mazda) in a strategy centred on Asia and the Pacific region.Joint ventures were also established with European manufacturers during this period: between Honda and British Leyland in the United Kingdom, between Nissan and Motor Iberica in Spain, and...

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