Toyota’s European Operating Exposure Essay

GM could perform the same analysis as above but for the major Japanese players: Toyota, Honda, and Nissan. By calculating the increase in profits (or loss) and change in market share for these three companies (adjusted for market growth), GM can estimate the sensitivity of its profits to depreciation (or appreciation) of the Yen.

What the Euro experience has taught us is that even countries which are not vastly different from each other in terms of economic health, can face a phenomenal crisis within just 10 years of the creation of the single union. How then would you expect a global currency encompassing countries with vastly different structures, in vastly different stages of growth and using vastly different means of managing their economies to be stable?

Following WWII and during the Cold War, there was a sense of instability in Europe. To counteract this, many nations believed that a united Europe could suppress the intense nationalism and militarism that lead to both world wars. Other nations reacted with advocacy, protest or were simply equivocal. Post WWII Europe was extremely chaotic and disjointed. Alliances had been made and broken during the world wars, so tensions were at an all time high throughout the continent.

Looking into the competitive threat more closely, the auto industry in the United States is rather sensitive to price, with a price elasticity of 2, or a 5% increase in price contributing to a subsequent 10% fall in demand. Thus, based upon the sticker price decreases potentially implemented by Japanese automakers, Japanese companies’ combined market share (roughly 4.1m units in 2000) stands to increase substantially, and could eat into General Motors’ overall market share. To highlight the sensitivity to the USD-JPY spot exchange rate, GM’s VP of Finance, Eric Feldstein, suggests that just a one-yen depreciation increases competitors’ operating profit by $400m. With $900m in net yen receivables, $500m in outstanding yen-denominated bonds, and more

Cole, R. E. (2011). What really happened to Toyota? MIT Sloan Management Review, 52(4), 29-35. Retrieved from http://search.proquest.com.library.capella.edu/docview/875531966?accountid=27965

Whether the United Kingdom decides to join the European single currency and replace the pound with the euro will have profound economic as well as political effects on the country so is a very important decision and has considerable variations in attitudes towards the topic, although the British public opinion has consistently opposed joining the euro. The euro is currency shared by 18 of the European Union's Member States. The euro was introduced in 1999 and automatically became the new official currency of 11 States, followed by another 7 countries joining to date. However, the UK negotiated an opt-out to from the Treaty meaning they don’t have to adopt the common currency as they fit a certain criteria [1]. Joining the European single currency can have major advantages for the UK, such as diminished uncertainty of exchange rate for businesses and the decreased need to pay transaction costs of changing currencies when abroad. It can also have disadvantages such as loss of domestic monetary policy and variable rate debt in the UK.

As a solid business, Toyota should have realized they needed to hire more people to work, not force the current employees to work more. If Toyota would have done this, they would have not only championed new world thinking, but also would have created more jobs to hire more people thus helping lower unemployment in those countries.

Toyota is a leading company, and for over 70 years. It has been expanding business all over the world and

The introduction of Toyota Prius was not just a short term goal. Toyota had much broader goals.

Toyota is currently the biggest car maker in the world. Toyota’s production model has been for long the envy of Detroit’s big three and the benchmark for the auto industry. The auto market in the US has showed signs of improvement, a sign of encouragement for the company (Toyota History: Corporate and Automotive, 2011). Toyota has invested billions of dollars to develop manufacturing capabilities and supplier networks to supply those markets. Toyota has many comparative advantages over it peers: a strong operational model that generates high margins; a strong global brand synonymous for quality and a

Here in the case to study the competitive advantage of Toyota measures on the following

In 2009 Toyota Motors (TM) posted a net loss of $4.6 billion ("Market watch," 2014). From 2009 to 2011 Toyota encountered a number of factors contributing to their economic downturn. It began with recalling millions of vehicles, for quality related problems, followed by natural disasters hitting northeastern Japan. These disasters wiped out Toyota’s production capabilities (Tabuchi & Vlasic, 2014). While these events were occurring, the cloud of the 2008 global financial crisis was still being felt. This crisis weakened demand in the automotive industry. This weakened demand increased the competitive landscape for all automotive manufactures. This drove down automotive prices and effectively contribution margins (i.e. sold less

Currently recession is prevailing in the market so the global car sale of Toyota is showing a downward trend. Also changes in interest rates, inflation and currency rates can act both as a threat and an opportunity. Inflation rates differ from country to country for instance in Japan the inflation rate is relatively low as compared to USA. The lower the interest rate, the better its for Toyota since the

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.

main strategy for the North American market is to aim for higher sales, while raising the proportion of locally produced automobiles. Toyota Motor Corp have reached a stage where investments made over the last several years to expand production capacity are beginning to show returns and improved profitability can be expected. Toyota’s goal is to bolster local production through additional investment, and contribute to the regional economy by expanding its operations. At present, our production capacity in North America is approximately 1.25 million units (including our joint venture with GM). However, Toyota Motor Corp plan to boost this to 1.45 million units during 2003.