Issues for Toyota in China Report

Added on - 21 Apr 2020

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Running head: Toyota in ChinaToyota in chinaResearch report
Toyota in China1Executive summaryThis report throws light on various issues faced by Toyota in china. At present, Toyota only hasa 4.93% market share in china. This performance is due to various factors including changingdemands of Chinese consumers, china japan rifts, high price of Toyota vehicles and unfavorabletax policies in china. This report has recommended strategies that Toyota can follow in theChinese market that would assist the firm in gaining a larger market share and an increasedcustomer base.
Toyota in China2ContentsExecutive summary.........................................................................................................................1Introduction......................................................................................................................................2Issues faced by Toyota in china.......................................................................................................2Losing market share in China......................................................................................................2Resistance for Japanese products.................................................................................................2High price of the vehicles............................................................................................................3China-Japan territorial rift............................................................................................................4Preference of electric vehicles in China.......................................................................................5Desired outcomes of Toyota in China.............................................................................................6Recommendations for Toyota in China...........................................................................................7Risks for Toyota in china.................................................................................................................9Risk management strategy...............................................................................................................9Conclusion.....................................................................................................................................10References......................................................................................................................................11
Toyota in China3IntroductionToyota is a Japanese multinational automotive company headquartered in Aichi, Japan. Theautomobile giant was founded back in 1937 and has since been on the trajectory of growth. It is aleading name in the industry owing to the reputation of being the largest automobile company isthe world. Toyota is well known for its hybrid electric vehicles and the philosophy of massproduction. Toyota has adopted ‘lean manufacturing’ and ‘just in time production’ which hashelped the firm save time and reduce waste effectively leading to improved performance. Thesemanagerial values and business methods are collectively known as ‘The Toyota way’ (Gao,2015).Issues faced by Toyota in chinaLosing market share in ChinaNot just Toyota but all Japanese carmakers are losing the Chinese market. Back in 2008,Japanese carmakers like Toyota, Nissan and Honda occupied a proud 30% of the Chineseautomotive market share. Since then until this year, the share first dwindled around 19% andthen finally crashed to 12% this September. This is also because that it has been observed thatJapanese carmakers have been slower to understand Chinese needs and demands as compared totheir European counterparts. Volkswagen and General Motors have been successful in adaptingto the Chinese needs and have thus been able to maintain their market share as well as brandvalue in the price sensitive market.Resistance for Japanese productsAnother major disadvantage is the general preference of Chinese customers being biased towardsAmerican and European designs rather than Asian. Customers in china believe that westernproducts have a certain cachet which is lacked by Asian counterparts. Also the perception ofAsian goods being unsafe has only added fuel to fire.
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