Legal Aspects of International Enterprise - Toyota Motor Corporation

This report focuses on the legal aspect of international business in the context of Toyota Motor Corporation. The legislative regulatory framework impacting the company and treaties, conventions or agreements that have impacted the products of the company are discussed.

Running head: LEGAL ASPECTS OF INTERNATIONAL ENTERPRISE
Legal aspects of international enterprise
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1LEGAL ASPECTS OF INTERNATIONAL ENTERPRISE
Executive Summary
This report focuses on the legal aspect of international business in the context of Toyota Motor
Corporation. This is one of the famous companies, serving high quality of automobile produces
in an environmental-friendly manner. The company is highly committed towards integrating
sustainability in the society by manufacturing emission free cars. Toyota Australia is one of the
famous subsidiaries of Toyota Motor Corporation which is intended towards manufacturing and
marketing Toyota products in the Australian market. This, it is imperative for Toyota Australia to
follow the legal framework of the country in order to run their business in a comprehensive
manner. There are multiple safety standards, introduced in Australia which are needed to be
followed by Toyota Australia to ensure the safety and security of cars. Such standards have also
served Toyota Australia with the ability to maintain their corporate social responsibility.
Numerous treaties have also been signed by Toyota to expand their product line and thus catch
the attention of customers.

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Table of Contents
Introduction:....................................................................................................................................3
Brief overview of Toyota Motor Corporation:................................................................................3
Identifying the legislative regulatory framework impacting the company:.....................................4
Identifying treaties, conventions or agreements that have impacted the products of the company:
.........................................................................................................................................................7
Conclusion:......................................................................................................................................9
Reference List:...............................................................................................................................10

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Introduction:
As the globalization is increasing in a rapid manner, there are numerous organizations
who are aiming to run their business in the global market. The fundamental aim of the companies
is to get international recognition and this increasing rate of profitability by getting a strong base
of customer. However, as the nature of international business is highly volatile, the standard of
rules and regulations are also changing in a rapid manner. The legal system of individual
countries are also changing promptly which can have a firm impact on both the domestic and
foreign companies. This paper puts forth the discussion of the legal aspect of international
business in the context of Toyota Motor Corporation. This paper will highlight the legislative
framework of Australia, which is affecting the functionality of the company. The role of treaties
or agreement on the products of Toyota Motor Corporation will also be discussed in the report.
Figure 1: Toyota Motor Corporation Logo
(Source: Toyota Motor Corporation Global Website. 2018)

4LEGAL ASPECTS OF INTERNATIONAL ENTERPRISE
Brief overview of Toyota Motor Corporation:
Toyota Motor Corporation is one of the famous multinational automobile companies,
producing automotive products. The head quarter of the company is Japan, which is running their
business successfully throughout the world. Toyota Australia is one of the most significant
subsidiaries of Toyota Motor Corporation which markets Toyota products in Australia. In
addition to that, Toyota Australia also holds the responsibility of marketing the Lexus vehicles in
the country. Headquarter of the company in Australia is in Port Melbourne from which, the
entire functionality is being operated. There are multiple products, produced by the company
which ranges from four-wheel drive, hybrid cars, sedans, Utes and vans along with sports
vehicles.
The number of staffs, working in Toyota Australia is 4,129 who are highly committed
towards producing high quality of products. The total number of staffs working in Toyota all
over the world is 69,148 (Toyota-global.com. 2018). Producing resource reliable vehicles is the
fundamental focal point of the company. Their underlying aim is to promote sustainable
development in the society by serving high quality of products. The global vision of Toyota
Motor Corporation is to be the leader in automobile industry.
Identifying the legislative regulatory framework impacting the company:
Legislative regulatory framework is considered as one a certain set of rules and
regulations that can have a strong impact on the internal functionality of global firms. The
inclusion of strong legislative regulatory framework creates certain obligations for the companies
to run their business in a systematic manner. According to Ross (2017) being the bestselling
automotive brand in Australia, Toyota has secured majority of market share in the entire

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industry. However, there are certain rules and regulations in Australia, which are acting as a
driving force behind the company to run their business in a comprehensive manner. The most
significant challenge, being faced by Australian automobile industry is in terms of designing the
products. The Australian Design Rules (ADRs) is one of the major national standards, executed
in recent times for the sake of ensuring safe and emission free vehicles. According to Motor
Vehicle Standards Act 1989, it has become the matter of utmost importance for the automotive
companies like Toyota to comply with that of the Australian design rules before supplying the
car in the Australian market. This act also highlights that, it is significant for Toyota to run
registered automotive workshop in order to promote their products in the market (Infrastructure,
Regional Development and Cities 2018).
The inclusion of rules and regulations related to tax is a significant factor which can
impact the company to run their business in a cost effective manner. The legal system of the
country has fixed certain amount of GST on the luxury cars. It is important for the companies
like Toyota to give the GST of one eleventh percent on the total amount of every cars. Income
tax is also being provided by Toyota. During 2017-2018, the rate of income tax for Australian
automobile industry is $57,581 (Ato.gov.au. 2018). Certain vehicle safety rules have also been
implemented in Australia. This is the way, through which the safety of the cars is being ensure.
This is the key factor for protecting the health and well-being of the customers. According to
Road Traffic (Vehicles) Act 2012, it is imperative to get license from the government before
introducing any motor vehicles in the public road. Therefore, it has become highly significant for
the companies like Toyota to get registered license for every car before running them in the road.
Road Traffic (Vehicles) Regulations 2014 has also been executed in order to impose specific

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requirement on vehicles. Part 5 of this act deals with the drive safe publications on the motor
vehicles (Transport.wa.gov.au. 2018).
As discussed by Maurer et al. (2016) Noise Level Assessment is one of the most
significant practices, being followed in Australia. This regulatory framework highlights that it is
imperative to test the noise level of a car before operating them in the public road. This is leading
the companies like Toyota to appoint an approved officer in order to carry out an intense noise
level assessment. Australian Light Vehicle Standards Rules (ALVSRs) is one of the most
effective regulatory framework, executed in Australia. The fundamental aim of this regulation is
to promote healthy coordination between the road agencies, the representative from the
automotive industry, along with the road safety experts and police in order to monitor the
durability of the cars in the road. Manufacturing heavy vehicles is also a significant aspects Of
Toyota Australia. Therefore, they also need to follow Austroads framework (Singer 2018). This
framework imposes certain regulation for running the heavy vehicles in the regional and remote
areas of Australia. This is basically a framework which needs to be followed by the heavy
vehicle like Toyota to operate their products properly in the road.
Fuel tax credits is also being followed by the Australian automobile industry. As per the
view of Conlon and Perkins (2018) the amount of fuel tax credit is entirely dependent on the rate
of usage of fuel by a company. However, this framework is not applicable for the light weigh
vehicles whose gross mass is below 4.5 ton. Oil program is also a major undertaking of
Australia. It is the prime responsibility of the companies like Australia to manufacture the
vehicle in such a manner which am support in running the, through recycles oil. It is true that
Toyota is highly committed towards maintaining their corporate social responsibility. Still, this
framework is serving them with the ability to manage the used oil in an environmentally

7LEGAL ASPECTS OF INTERNATIONAL ENTERPRISE
sustainable manner. In this framework, it is imperative to give the excise and customs duty on
using the petroleum based oil (Ato.gov.au. 2018). Another major transport rule in Australia is
Cleaner fuels grants scheme. The underlying mission of this scheme is to provide the vehicle
manufacturers with the fuel grants which is the key of running business in an environmentally
sustainable manner. With the assistance of this scheme, the automotive companies like Toyota
has acquired cleaner fuels, renewable diesel along with biodiesel and thereby run thereby
practice their corporate social responsibility (Conlon and Perkins 2018).
Identifying treaties, conventions or agreements that have impacted the
products of the company:
Treaties can be considered as an agreement which intends to make massive change in the
interval functionality of a company and thereby getting result outcome fro, business. The
automobile treaty with Maruti Suzuki in order to improvise their product line and thereby
strengthen their position in the market. Toyota has also partnered with Baleno and Brezza as well
as Suzuki in terms of offering Corolla sedan to that of the maruti. The aim of both the companies
is to lead the global automatic industry by 2020. This business treaty has been signed during
February 2017. This business partnership aims to introduce electric vehicle in the Indian market
by 2020. Through the intense competition in between the companies, the core aim of both Suzuki
and Toyota to amplify the automotive market of the country by providing the customers with
high quality of products (Businesstoday.in. 2018).
In addition to that, during August 2016, Toyota Motor Corporation and their major
subsidiary Daihatsu Motor Co., Ltd have made an agreement for the sake of strengthening the
Small Car Operations. This agreement intends to produce high quality of cars especially for the

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section of small car with the assistance of unified strategy. This agreement will serve both
Toyota Motor Corporation and Daihatsu Motor Co., Ltd with the ability to get sustainable
development. This agreement has enabled Toyota Motor Corporation to make lucrative design of
the small cars that can catch the attention of customers easily. At the same time, this treaty also
aims to share the exchange and thus amplify the value of both the brands. It is true that both
Toyota Motor Corporation and Daihatsu are engaged with a friendly competition. The
management approach of the companies are also different from each other (Beer 2018). Still, the
shared strategy can have a firm impact on promoting the next generation technology which is the
key of attaining sustainable growth of business. As per the Akio Toyoda, the president of Toyota,
the shared strategy will act as a greatest opportunity for both of them, by which they can have the
advantage of the strength from each other. This is the way, through which they can put stress on
their core competencies which is very much needed in order to sustain global competitiveness.
Under this joint strategy, both Toyota and Daihatsu are showing intense commitment to
combine their operational base and thereby enjoy their areas of technical expertise and
proficiency to get operational excellence. Small cars, technology and Operations are the core
areas of collaboration between Daihatsu Motor Co., Ltd and Toyota Motor Corporation. With the
assistance of this shared strategy, both the companies can optimize their product line in
accordance with the requirements of customers. This is the mode of accelerating the product line
by introducing high quality of small cars (Autocar.co.uk. 2018). Another significant aspect of
this collaboration is that, this will help both the companies to implement deployment strategies in
order to adapt new technology to make environmental friendly cars. As the result of this
collaboration, Toyota has executed fuel-efficient technologies which is the key of improving the
cost-effectiveness of the cars.

9LEGAL ASPECTS OF INTERNATIONAL ENTERPRISE
At the same time, during August 2017, Toyota Motor Corporation and Mazda Motor
Corporation has made an agreement to enter into the capital alliance and thereby reinforce their
long-term partnership. The companies have signed the treaty in terms of establishing vehicles in
the United State, adapting technology in order to produce electric vehicles and develop the
connected car technology in a collaborative manner (Mathur et al. 2018). Another vital aim of
this treaty is to execute innovative safety technology and thereby expand their complementary
product line. Both the companies have entered into a capital alliance agreement which can result
in equality and independence of both of them. According to the capital alliance, Toyota Motor
Corporation will hold the responsibility of subscribing and thereby acquire share through a third
party. In the same way, Mazda Motor Corporation will also subscribe and thereby acquire the
third-party allotment. This is the key of strengthening the value of share of both the companies
(Newsroom.toyota.co.jp. 2018).
Conclusion:
Based on the discussion, it can be concluded by saying that Toyota Motor Corporation is
being highly impacted by the Australian legal system along with multiple treaties and
conventions. As the giant in the global automobile industry, the company is highly committed
towards producing environmental-friendly cars, which can protect the health and well-being of
the customers. Enormous motor vehicle standard are serving Toyota with the ability to produce
emission free cars which is the fundamental factor of catching the attention of customers.
Different vehicle safety rules have also been introduced in Australia which intend to ensure the
safety of the cars. In addition to that, roadmap has also been introduced in Australia for running
the heavy vehicles in the rural and regional zones of the nation.

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Reference List:
Ato.gov.au. (2018). Cars and tax. [online] Available at:
https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Cars-and-tax/ [Accessed
31 Aug. 2018].
Ato.gov.au. (2018). Product stewardship for oil program. [online] Available at:
https://www.ato.gov.au/business/fuel-schemes/product-stewardship-for-oil-program/ [Accessed
31 Aug. 2018].
Autocar.co.uk. (2018). Toyota to take full control of Daihatsu | Autocar. [online] Available at:
https://www.autocar.co.uk/car-news/industry/toyota-take-full-control-daihatsu [Accessed 31
Aug. 2018].
Beer, A., 2018. The closure of the Australian car manufacturing industry: redundancy, policy and
community impacts. Australian Geographer, 2(1), pp.1-20.
Businesstoday.in. (2018). Toyota and Maruti Suzuki to share models from next year. [online]
Available at: https://www.businesstoday.in/sectors/auto/toyota-maruti-suzuki-india-share-
models-next-year-baleno-corolla/story/273622.html [Accessed 31 Aug. 2018].
Conlon, R. and Perkins, J., 2018. Wheels and deals: The automotive industry in twentieth-
century Australia. Routledge.
Infrastructure, Regional Development and Cities. (2018). Australian Design Rules. [online]
Available at: https://infrastructure.gov.au/vehicles/design/ [Accessed 31 Aug. 2018].

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Kushwaha, G.S. and Sharma, N.K., 2016. Green initiatives: a step towards sustainable
development and firm's performance in the automobile industry. Journal of cleaner production,
121 (2), pp.116-129.
Mathur, S., Valecha, R.R. and Khanna, V., 2018. A Study on the Impact of Green Marketing on
Consumer Buying Behavior in Automobile Industry. International Journal for Advance
Research and Development, 3(1), pp.286-290.
Maurer, M., Gerdes, J.C., Lenz, B. and Winner, H., 2016. Autonomous driving. Springer Berlin
Heidelberg, Berlin, Germany.
Newsroom.toyota.co.jp. (2018). Toyota and Mazda Enter Business and Capital Alliance |
TOYOTA Global Newsroom. [online] Available at:
https://newsroom.toyota.co.jp/en/detail/18012215 [Accessed 31 Aug. 2018].
Ross, H.L., 2017. Settled out of court: The social process of insurance claims adjustments.
Routledge.
Singer, L., 2018. Settling disputes: Conflict resolution in business, families, and the legal system.
Routledge.
TOYOTA MOTOR CORPORATION GLOBAL WEBSITE. (2018). TOYOTA MOTOR
CORPORATION GLOBAL WEBSITE. [online] Available at: https://www.toyota-global.com/
[Accessed 31 Aug. 2018].
Toyota-global.com. (2018). TOYOTA MOTOR CORPORATION GLOBAL WEBSITE | 75 Years
of TOYOTA | Personnel Matters | Changes in the Number of Employees. [online] Available at:
https://www.toyota-global.com/company/history_of_toyota/75years/data/
company_information/personnel/employee/index.html [Accessed 31 Aug. 2018].

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Transport.wa.gov.au. (2018). Vehicle safety and standards. [online] Available at:
https://www.transport.wa.gov.au/licensing/vehicle-safety-and-standards.asp [Accessed 31 Aug.
2018].