Cross Industry Analysis of Toyota Corporation's Entry into Chinese Market

ASIA PACIFIC BUSINESS (TOYOTA CORPORATION)

TABLE OF CONTENTS
PARTICULARS REMARKS
1. Introduction
2. Industry analysis
2.1 Toyota’s FDI in China
2.2 Where did the investment go
2.3 How and when did Toyota become an
MNC
2.4 Toyota’s strategy
2.5 Market entry of Toyota
2.6 Are there different patterns in the
timing, location, strategy and entry mode
of multinationals from different nations
3.Why did Toyota go global or
Multinationalize
3.1 Benefits, capabilities and resources
Toyota possessed to succeed
4. Conclusion
1. Introduction- Established in the year 1937, Toyota Motor corporation is a Japanese
firm which engages within works of designing, manufacturing, assembling and sale of

several cars, commercial vehicles, minivans and other parts related to cars as well as
accessories majorly within markets of Japan, Europe, North America and Asia. Toyota is
actually an innovative, well organized and customer oriented firm (Toyota-global.com,
2018).
This study will undertake a cross industry analysis for Japanese automobile firm Toyota
Corporation that entered Chinese market. It will evaluate the level to which the Japanese
manufacturer was capable of retaining its competitive position as an MNC in the global
market
2. Industry analysis- Toyota competes within the industry of automobiles. Last five
years of the firm were tumultuous being into industry of automobiles. Rise in prices of
fuel and emerging ecological trends as well as people’s concern regarding environment
has shifted buyer’s preferences away from the fuel-guzzling pickup trucks and vans to
some small and compact cars with fuel efficiency. Few players in the industry have also
embraced the alterations taking place and they have expanded themselves from small car
segment portfolio to making of eco friendly and hybrid motor vehicles. Few automakers
have been unenthusiastic towards such shift and their main emphasis has been to shift
from mere bigger to smaller cars, anticipating the cost of fuel to shrink ultimately,
bringing buyers back towards big car fold. When prices of fuel fall in 2008, it was
because of economic crisis in US, which ripped the global economy entirely. This
immensely had a domino effect all through the emerging and developing world, with
several western countries following US into recession. Revenue of this industry fell about
by the recovery were expected to lend the entire average growth of industry for about
2.2% every year for 5 years till the year 2013. For next five years, emerging economies
would continue growth as well as demand for motor vehicles within western world would
recover. Revenue of the industry is forecasted to grow at a rate of 2.5% to total an
estimated $2.6 trillion over next five years till 2018 (U.S., 2018).
2.1 Toyota’s FDI in china-Foreign direct investment of Japan inflows to china are rising
as well as diversifying from manufacturing to other sectors, fascinated by availability not
merely of cheap yet skilled labor. At same time, novel wave of FDI linked with

relocation is even stirring opposition in Japan. Additional to sectorial diversification, a
proper geographical shift within FDI patterns into China is occurring. Japan’s main focus
is upon proximate coastal clusters like Dalian within Liaoning province, is being actually
supplanted by the pull of Shanghai as well as the Pearl River Delta. The influx of three
automakers, Honda, Nissan and Toyota, with their Japanese-affiliate part producers, is
even building new FDI clusters (Walsh, 2001).
2.2 Where did the investment go -
Several discrepancies occur amid Chinese plus Japanese statistics. It is thus, hard to
identify FDI of Japanese that is routed via subsidiaries within Hong Kong or several other
nations. As per Japanese data, FDI from Japan to China in the year 1999-2000 dropped
severely below $1 billion, beforehand recouping to some $2 billion in the year 2001.
As per estimates of China, FDI of Japan and its totals were some $3.8 billion on an
average in the year 1996 to 98 (Walsh, 2001).
2.3 How and when did Toyota become an MNC?
Because of the fast development of global integration the industry of automobile has
become world’s most significant financial sectors by revenue. Toyota is a representative
of all MNCs within the globe. Established in the year 1937, till day Toyota carries both
global as well as domestic marketing with 52 international firms in some 27 nations.
Toyota sells and markets 7 million vehicles in 170 nations and even more each year,
globally. Its employees throughout the globe are 320.808. In the year 2008 the firm
officially became globe’s largest automobile supplier. Fast expansion is major cause of
the firm to be capable of overtaking General Motors. Toyota functioned its business all
through the globe, which involves selling of cars and other vehicles in Africa as well as
Russia plus sales leader within Australia.
2.4 Toyota’s strategy- Strategies of Toyota aims to attain success within chosen markets
to grow its business: