Case Study Of Toyota Europe

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1. Why do you think Toyota had waited so long to move much of its manufacturing for European sales to Europe?
The idea of relocating a new manufacturing plant to Europe was Toyota's reaction to avoid the fluctuation in the foreign exchange rate, Since the Japanese Yen was appreciating against the Euro, hence selling the cars that were being produced in Japan had become more expensive to sell in the European market. In order to maintain the price competitiveness, Toyota had to absorb the extra costs that had been incurred due to the changes in the exchange rates. To cope with the strengthening of the yen, the only solution that Toyota had was to look at options of building a manufacturing plant and they did so by launching one in France. This
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What measures would you recommend that Toyota Europe take to resolve the continuing operating losses?
As mentioned earlier, the main problems which are reflected through the data seen in the case study is based on the exchange rate fluctuations that were predominant during this phase;
• The Japanese Yen was constantly gaining against the Euro which was constantly falling during the 2 years of 99’ and 2000, this had resulted in Toyota bearing the costs that were incurred due to these significant fluctuations in these 2 years.
• It is also important to note how Toyota had gained such a stronghold in the operations and sales in North America, since they had been more practical about setting up manufacturing plants in North America. This was not the case with regard to Europe since all the manufacturing was done in Japan, which obviously had sky rocketed the costs for the vehicles that were being sold in Europe. The biggest positive that can be taken is how they decided to manufacture a car that was targeted to sell in Europe the Toyota Yaris but sadly the manufacturing was being done in Japan and this was the underlining
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