The Global Expansion of Toyota
In 2008, Toyota to officially become world largest automaker, the rapid expansion is the main reason Toyota able to overtake GM as world's top car firm. Toyota operated business across the entire world, which including: Sales vehicle in Africa and Russia and sales leader in Australia. Toyota were Launched Lexus and SCION in United States and norther American market.
Figure Toyota sales by region. (Source: Toyota annual report, 2009)
In recent years, Toyota has focus on global market expansion, especially, China market. Because the tendency of Chinese consumption pattern is change.
Toyota FDI in China.
China overtake United States become to new fdi destination by 2004. This is due to the China adoption reform and opening up policy in the late 1970. Toyota believes that China's market is potentially as large as the U.S. Market. Toyota aims consistently increase investment in China to grow production capacity and add to product lineup along with begin to produce Camry at Guangzhou Toyota Motor Co., Ltd on May 2006.
According to XinHua News report that Toyota intend to invest about $700 million in its first fully-fledged research and Development base (R&D) in China. Because, Toyota wants to increase the production in China.
Since 2005, Toyota through the form of join-venture with Chinese company (FAW Group Corporation) to build first plant in SiChuan province until now, Toyota was invested to build seven plants in China, and another six plants of Toyota also joint-ventures with FAW.
Toyota establish oversea plant in response to incentives such as tariffs, reduction of labour cost, and
Toyota production system
The PEST analysis on Toyota
Political
The auto industry is subject to various governmental rules and policies. The political environment of China does favor enterprises with foreign investment. According to Government policy 2009, the Chinese government levies low tax on enterprise with foreign investment, and preferential tax policies are offered to the sectors and regions where investment is encourage by the state. And the low tax policy reflected in three aspects: income tax, circulation tax, and import-stage value-added tax. At the same time, the China government announced several preferential policies to encourage auto consumption, which include the people who living countryside can enjoy 10% subsidy of the original vehicle price for their buy it. Second, the tax of purchase small-displacement vehicles was cut from 10% to 5% (Chinavestor, 2010). These preferential policies stimulated auto consumption significantly, and attract more foreign automobile company invest in China.