Legal and Regulatory Analysis of Toyota Motor Corporation in Australia

This report provides a comprehensive analysis of the legal aspects of Toyota Motor Corporation's international business operations, with a specific focus on its activities within Australia. The report begins with an overview of Toyota, its global presence, and its operations in Australia. It then delves into the legislative and regulatory framework that governs Toyota's operations in Australia, including key legislation such as the Competition and Consumer Act 2010, the Fair Trading Act 1992, the Fair Work Act 2009, and the Corporations Act 2001 (Cth). The report also examines the impact of various treaties, conventions, and agreements, such as the Japan-Australia Free Trade Agreement (JAFTA), ASEAN-Australia New Zealand FTA, and Australia United States Free Trade Agreement (AUSFTA), on Toyota's products and services. The analysis highlights how these legal and regulatory factors influence Toyota's market access, compliance requirements, and overall profitability, emphasizing the importance of legal compliance and strategic navigation of international trade agreements for multinational corporations. The report concludes by underscoring the significance of understanding and adapting to the legal environment for successful international business operations.

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Legal Aspects of International Business and Enterprise
Total word count: 1883 words

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Question 1
Toyota Motor Corporation
Toyota Motor Corporation is a Japan-based multinational organisation which was founded in
1937; the company operates in the automotive industry and it is an internationally recognised
brand (Toyota, 2018a). The corporation is the world first automotive company which has
manufactured over 10 million vehicles for each year since 2012. The headquarters of Toyota
Motor Corporation is situated in Aichi, Japan. Globally, the company is the global leader in
selling hybrid electric vehicles. The enterprise has established its operations in 28 countries
and it offers its products in more than 170 nations. The company is one of the biggest
automobile manufacturers in terms of profitability and market share. Toyota Motor
Corporation has hired more than 364,445 employees to manage its operations globally
(Toyota Global, 2018). Currently, there are over 1,300 employees working for Toyota Motor
Corporation to manage its operations in Australia (ABC, 2017). The company manages its
operations in Australia through its subsidiary called Toyota Australia which handle all the
operations of the corporation in Australia.
Total word count: 171 words

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Question 2
Legislative regulatory framework for Toyota Motor Corporation in
Australia
The Australian government implements a number of regulations on the corporations
operating in the country in order to govern their operations. These regulations are
implemented by the government to ensure that companies manage their operations ethically
in the country. The government imposes strict penalties on the enterprises which did not
comply with the policies given under these legislative frameworks. Proper compliance with
these policies is important for multinational organisations if they wanted to continue to
manage their operations in the country (Business, 2018). Based on compliance with these
policies, multinational enterprises avoid legal penalties which the government imposes on
their operations if they fail to comply with their legal framework. Therefore, these
corporations have to identify the rules which they have to follow while managing their
operations in different countries. In Australia, the government supports multinational
enterprises and their operations because they bring employment opportunities for local
citizens. They also contribute to the economy of the country while at the same time offering
better products and services to their customers. However, enterprises such as Toyota Motor
Corporation are substantially large with huge market share and high profitability. Therefore,
the government focuses on ensuring that these organisations are not breaking any laws to
eliminate competition from the industry (Toyota, 2018b).
The Competition and Consumer Act 2010 is imposed by the government to deal with this
issue. This act ensures that corporations such as Toyota Motor Corporation are not using their
position in the market to remove all other small competitors to establish their monopoly
(Austlii, 2018). It is easy for these enterprises to acquire the business of small corporations to
eliminate their competition from the industry. However, elimination of competition is bad for
the economy of the country and its citizens. The company which has a monopoly in the
market can easily increase the prices of its products which adversely affect the markets and
customers. Thus, the government of Australia has implemented this act to ensure that
corporations are not misusing their position in the Australian market. Similarly, the Fair
Trading Act 1992 is also implemented by the government in order to ensure that corporations
are fairly trading in Australia (Emmerich et al., 2013). It prevents them from forming any

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contracts which are focused on destroying the competition in their respective industry. Due to
these regulations, the customers are able to get high-quality products and services in Australia
from multinational enterprises at fair prices.
While operating in Australia, Toyota Motor Corporation has to ensure that it maintains a
positive relationship with its employees who are running the operations and involved in
procedures such as marketing, manufacturing, selling and others. Effective relationship with
employees also enables Toyota Motor Corporation in offering high-quality services to its
customers when they wanted to fix up their vehicles. From a legal perspective, positive
relationship with employees is also necessary for Toyota Motor Corporation to maintain as
per the guidelines are given in the Fair Work Act 2009. This act is enacted by the Australian
government while focusing on the rights and benefits of the workers (Macdonald and
Charlesworth, 2013). The act ensures that employees are treated rightly in the organisations,
and the company is not violating their rights by putting too much pressure on them or forcing
them to work overtime. Based on this act, Toyota Motor Corporation also has to provide
equal remuneration to its employees and ensure that the salary amount is not less than the
minimum wage which is provided by the government. Toyota Motor Corporation also has to
comply with the Corporations Act 2001 (Cth) which provides a number of guidelines for
companies operating in Australia.
The breach of regulations of this act results in the imposition of financial penalties on the
operations of the enterprise. The board of directors of the company has to comply with these
guidelines and the duties imposed by this act while they are forming future business
strategies. Section 180 to 183 provides various duties which directors have to comply with
(APH, 2018). The objective of these duties is to ensure that the personal interest of directors
did not conflict with their professional interest. Toyota Motor Corporation also has to comply
with the taxation regulations in Australia. The tax is imposed on the income which Toyota
Motor Corporation generates from its products and services which are offered in Australia.
Currently, the corporate tax rate in Australia is 30 percent; however, the government has the
power to change this rate (ATO, 2018). A high level of tax results in discouraging
multinational enterprises from entering in Australian markets. On the other hand, the
company also has to pay the Goods and Services tax which imposed on the products and
services which it offers to its customers. Currently, the GST rate is at 10 percent, however,
similarly as the corporate tax rate, the government has the power to change this rate as well

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(Meng, Siriwardana, and McNeill, 2013). Toyota Motor Corporation has to effectively
comply with these regulations in order to avoid legal penalties in the country.
Total word count: 848 words

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Question 3
Treaties, conventions, and agreements which affects Toyota Motor
Corporation’s products and services
Many countries sign trade treaties with each other in order to promote trade practices between
themselves which uplifts the economy of the country. The nations which entered into these
treaties benefit from them because they open new channels for the corporations operating in
their country to expand their operations in new markets while at the same time encouraging
foreign companies to establish their operations in the country as well. These trade channels
bring foreign currency into the nation which supports the GDP and economic growth of the
country. The Australian government has strong trading relationships with leading countries
such as the United States, China, Japan, India and the United States. Due to these trading ties,
the foreign corporations find it easier to establish their operations in Australia (Anderson and
Yotov, 2016). Similarly, Australian companies are able to enter into new markets due to these
treaties. Toyota Motor Corporation is a Japanese company and the treaties signed between
Australia and Japan assist the enterprise in offering its products and services in the country.
Japan Australia Free Trade Agreement or JAFTA is a treaty which is signed by the
government of both nations. The purpose of this treaty is to remove legal compliance which
international enterprises have to follow while expanding their operations in a country
(Wilson, 2012).
Furthermore, the government also removes various tariff, excise duty, and charges which
corporations have to pay otherwise. All these terms are included in this treaty in order to
encourage a trading relationship between the two nations. Toyota Motor Corporation is able
to expand its operations in Australia due to this treaty. Moreover, the company is able to offer
its latest products and services in the Australia market without waiting for a long time for the
approval of the government (Obradovic, 2012). Thus, due to this treaty, Australia has become
one of the key markets for Toyota Motor Corporation, and the company is able to generate
huge profits from the country. Furthermore, the convention between Australia and Japan has
established for the avoidance of double taxation on the profits which companies generate
while operating in these markets. This is important treaty for Toyota Motor Corporation since
the corporation brings its revenue back to Japan. However, payment of double tax would
discourage the company to expand its operations in Australia market since it will reduce its

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profitability (MOFA, 2018). Thus, the company offers its latest products in the Australian
market as soon as they are available because it generates huge profits from its operations in
Australia. The savings in taxes resulted in increasing the profitability of the enterprise.
Toyota Motor Corporation also provides its products in New Zealand through locally owned
dealerships, thus, the treaties formed between the governments of Australia and New Zealand
are beneficial for the company. The trade agreements formed between the two nations called
ASEAN-Australia New Zealand FTA is a good example. This treaty is signed between the
two countries to promote trade practices by removing various legal restrictions from the
regulatory framework (Ishido and Fukunaga, 2012). Thus, Toyota Motor Corporation is able
to bypass various complex legal requirements which it has to otherwise comply with while
expanding its operations in New Zealand. The government has also waived various tariff,
duties, and charges which companies have to pay otherwise while exporting or importing to
New Zealand. Therefore, Toyota Motor Corporation is able to export its latest products to its
dealers situated in New Zealand in order to reach a wider audience and provide better
services to its customers (Bano, Takahashi and Scrimgeour, 2013). Similarly, the United
States is one of the biggest markets for Toyota Motor Corporation. Thus, the trade treaties
signed between Australia and the United States and their positive trade relations benefit the
company is using its resources to capture these two markets. The trade agreement signed
between the two nations is called Australia United States Free Trade Agreement or AUSFTA.
The purpose of this treaty is to increase the trade practices between the two nations by
removing legal restrictions and heavy fees. Toyota Motor Corporation first launch its
products in the United States since it is one of its major markets, however, due to this treaty,
the company is able to soon launch such products in Australia as well (Lopert and Gleeson,
2013). The enterprise did not have to pay heavy fees or charges while exporting its resources
from the United States. Thus, this treaty has a significant impact on the products or services
which Toyota Motor Corporation offers to its customers while maintaining its operations in
Australia. Thus, these treaties play a crucial role in increasing or decreasing the profitability
of Toyota Motor Corporation since they help the company in increasing its customer base
(Kirchner, 2012). A solid customer base which is situated across the globe is the key
objective of the enterprise and the treaties formed between different nations assist the
enterprise in achieving this objective. The customers who belong to different countries are
also able to enjoy the latest products and services of Toyota Motor Corporation due to these
treaties, thus, it benefits them as well.

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Total word count: 864 words

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