Toyota’s Objectives in Global Automotive Industry

As an example of the series of economic contributions, Toyota has invested over $10 billion in the U. S. , and its dealers have spent nearly $9 billion more. Nationwide, Toyota directly employs 28,000 Americans and another 95,000 more work for Toyota dealerships. That’s a total of 123,000 American Jobs, and it is ore than Microsoft, Oracle and Coca-Cola in combined. Following Toast’s principal of “thinking globally but acting locally,” the company has eight U. S. Manufacturing facilities and a ninth under construction.

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About two-thirds of the cars and trucks Toyota sells in the U. S. Are now built in America. With 1. 6 million in sales last year and a 10 percent market share so far this year, Toyota is the third best-selling automobile brand in the U. S. , behind Ford and Chevrolet. While there are some positive signs boosting a fragile economy, the automobile sector has not been immune. Toyota will continue to see shakeups and reorganizations within the automobile industry as costs are brought in line with the deflationary economic environment.

*Plan for Globalization To ensure the timely delivery of vehicles that cater to customer needs in diverse regions around the world, Toyota is simultaneously advancing the globalization and localization of its operations. In the current competitive market, Toyota is taking the initiative by devoting itself to developing a highly appealing product lineup. Toyota is leveraging its full lineup to advance the penetration of its vehicles in arrest worldwide and to establish a solid operating platform that is regionally balanced.

To create a stable operational base, Toyota is actively building international production systems while increasing the localization of all its activities, including vehicle development, procurement, production, and marketing. Toyota aims to produce vehicles that perfectly meet customers’ various demands and deliver these vehicles in the right amount and time by focusing on the following objectives – highest quality, lowest production cost, and lowest time from production line to delivery.

By using the world famous Toyota Production System, Toyota is able to accomplish the objectives successfully. The Toyota Production System starts with system applies the concept of Just-Len-Time TIT) production with the principles to produce only what is needed, and when it is needed. SIT minimizes in-process inventory, employs least-time production, and removes the burden of extra inventory cost. (Reference: Toyota Motor Thailand) Further, the Toyota Way is playing an important role in unifying the efforts to promote globalization and develop human resources.

The Toyota Way is a comprehensive marry of its unique management and manufacturing philosophy since the company’s founding in 1937. *Raising Production Capacity Worldwide Toyota, like other manufacturers, recognized that high volume production runs would reduce unit costs and exports at the same time as generating duty rebates in certain countries. This would enable them to rationalize the number of locally produced vehicle models and augment them with a wide range of imported products which would make Toast’s offerings more tantalizing. Payne, 2002) While increasing production capacity around the world, Toyota is taking measures to instruct a global production system. As of July 2002, Toyota had built a total of 10 million vehicles in North America. In addition to boosting output at its four existing automobile assembly plants in the region, plans call for the construction of a new factory, Toyota Motor Manufacturing Texas, which will begin annual production of 1 50,000 Tundra pickup trucks from 2006. Toyota will also begin producing its small pickup truck the Tacoma in Mexico from 2005.

As a result, Toyota will have ramped up production capacity in North America from its current level of 1. 48 million vehicles to 1. 65 million by 2006. In Europe, Toyota intends to raise the combined production capacity in France, the United Kingdom, and Turkey from its present 500,000 units to 610,000 units. Beginning 2005, its Joint venture company established in the Czech Republic with AS Peugeot Citroen is scheduled to roll out 300,000 compact cars a year, of which 100,000 will be Toyota-brand vehicles.

In Indonesia, Toyota reorganized its local Joint venture into separate manufacturing and distribution entities. Toyota acquired a 95% stake in the manufacturing entity to enhance its operations as a global production, supply, and export center for vehicles and engines. In China, by strengthening its alliance with China FAA Group Corporation (FAA) Toyota will begin the Joint production of mid-to-high-end passenger cars, compact cars, and mid-to-high-end Subs. Toyota intends to capture 10% of the Chinese market by around 2010.

To ensure that the global operations develop unhindered, Toyota is expanding its employee training programs. The Toyota Institute, based at the head office, is responsible in cultivating the executives and middle managers essential for the operation of a global company. Toyota also took steps to integrate the training and technical skills of its employees at reduction sites worldwide by establishing the Overseas Support Center within its Matching plant in July 2003.

In July 2002, the Global Knowledge Center was established within the University of Toyota, the educational facility of Toyota Motor Sales, U. S. A. , Inc. , to promote the Toyota Way in sales and marketing. At the center, individuals from distributors worldwide are working together to study the world’s best marketing practices and to help develop cooperative relationships among distributors. Toyota is also implementing regional training programs, primarily in Europe, Asia, and Africa.