Toyota Auto Company Industry in Global Depression - Essay Example

Toyota Auto Company Industry in Global Depression Toyota is one of the largest and most respected vehicle manufacturers in the world. Diversifications of products, use of advanced technology, and commitment to high quality have been the factors driving the company’s success. 2005 was the company’s ninth successive period of outstanding sales in Europe. Sales grew by nearly 50 percent from 2000 to 2005. The novel plan was fiscally successful. The working profit augmented nine fold to $654 million in 2003. Introduction of the company in France, Turkey, Poland and Czech State boasted its income significantly. Toyota’s local assembly is being anticipated to surpass the current 60% mark. This lessened contact with transaction rates and importation tariffs. Within Toyota, sales augments from Europe were required to meet set global sales targets (Arthur, p.26). The year 2000 witnessed a massive growth in the car production industry. The number of cars produced that year increased from 30 million automobiles to approximately 60 million cars. From this entire production, more than half of the cars were produced by Toyota. However, for the European advertising panel of Toyotas mini cars, the confrontation persisted. In a fiercely competitive bazaar, they had to get 100,000 buyers yearly for the 3.41-meter. This section was viewed as a hard market where low prices implied low margins. Mercedes-Benz's firm recorded losses of 4 billion pounds between 2000 and 2005. Toyota Motor Firm recorded sales of 7.97 million units in 2005 which is an increase of about 2.5 million since 2000. Toyota Company in North America maintained as the most significant global bazaar. Market share was mounting swiftly. In 2005, sales rose to 2 million piece echelon for the first time. Toyota Company held 13.7 percent of the vital U.S. bazaar up from 9.3 percent in 2000. Sixty percent of the American order was contented by installing twelve firms in the NAFTA area. In 2006, Toyota was predicted to rise to 9 million pieces in production. At the moment, Toyota is in trouble as it is undergoing depression which is worldwide, and it is actually in much better look than virtually every other auto manufacturer. When we talk of competition, things are much poorer. Particularly talk of General Motors, which saw a catastrophic fall in sales of 54% in February, the issue is becoming increasingly worse. The full impact of the Global Economic Crisis is impacting all the magnificent plans and decisions of the world’s car makers, in the process cutting them to pieces. Of late, the CEOs of Fiat and Renault-Nissan claimed that the automobile markets would go through constant declines in 2009. The Big Three,” Chrysler, GM and Ford of Americas automobile home giants have been pushed with catastrophic sales falling thus causing them to beg the government for bailouts. Virtually nearly in every market the global economic catastrophe is destroying demand for cars. A sure indicator of how calamitous the circumstances are for the global car industry is the performance of Toyota, which is without a doubt on the planet it is the healthiest and most prestigious car manufacture. It not being an exceptional as mentioned it has now joined Detroit and European car makers in soliciting a bailout from their governments. Toyota has officially requested the Japanese government to provide a “bridge loan” of $2.2 billion; this request has followed some prior sales figures which have indicated that the Japanese behemoth faced a decline of 40% in sales of automobiles in its largest market, the United States of America. Some years before, the company was capable of exploiting a more poignant position around green matters. The Prius hybrid model, for example, brought fame to the Toyota firm. In 2005, it traded around 18,000 pieces of Prius in Europe. On global sales, it sold 180,000 pieces, and in 2010, it was expecting to sell 1,000,000 pieces universally. Hybrid expertise offered Toyota a fair chance to place itself as a technology chief. Hybrid edition fetched a price premium of 6,200 pounds. This was due to the application of gasoline-powered RX 300 in its production. It also offered D-Cat diesel engines having a diesel particle sift in Europe. Toyota usually topped customer contentment indexes such as J. D. Power. In Europe, Lexus models were vended with extended guarantees. These included a six-year guarantee, three years of free services, repairs and wayside aid, localization of production in Europe. The opening of the 1992 Toyotas first car and engine plant in the UK led to accelerated opening of plants in the new millennium. In 2005, Toyota had created 638,000 cars in Europe, and this was projected to grow to over 800,000 pieces in 2006. Toyota started combined venture with PSA. Toyota and PSA, which is an investment business for the Peugeot and Citroen, announced a half shared venture in late 2001. The firm was situated in the Czech Republic and was planned for a yearly supply of 300,000 pieces. The sector for mini cars had subsisted for an extensive period but emerged to be popular in recent years. Competitors either depended on cars from inexpensive nations like Fiat Panda and Hyundai Getz. Some other competitors went for long-lasting merchandise life cycles such as Renaults Twingo. Most other inventive aspects around the car such as the mobility concepts were either put on hold or radically lessened. According to Jonas & David (p.11), managers at TPCA stood for the welfare of both TPCA and their bosses. To lessen miscommunication, TPCA laid an orderly gathering structure. Everyday production conference occurred early in the morning. Project leaders meeting was conducted by both companies at first on a monthly basis but later changed to once a quarter. Steering team dealt with serious decisions. Meetings occurred either at Toyota's HQ in Tokyo or PSA's HQ in Paris. As the building of the firm progressed, advertisement bosses at Toyota were preparing for the positioning of the Aygo. The promotion confrontation for selling the Aygo was substantial. Toyota started conversing with possible clientele unusually early on in the early years. They formed an interactive Aygo online society as the youthful generation was not popular with the traditional promotion. Currently, about 90 million cars are produced by all combined produce of all automobile producers in the world annually. The harmful demand destruction being caused by the Global Economic Crisis has condensed buying’s to about 51 million units per year this means that the world’s automobile companies have nearly twice the productive capacity that a normal consumer demand can absorb. With the reduction in demand inflicted by the Global Economic Crisis, virtually every significant auto producer is faced with the same problem; overproduction that was caused with high levels of leverage leading to enormous losses with a global demand for only 50 million cars each year. This has led to the answer thus far by the automakers is to request their governments with enormous bailouts, warning the governments that deprived of the general public needs to cover their losses the resulting impact will be layoffs, catastrophic collateral damage to the general economy and the extermination of the industrialized base. Concerning aptitude management, the query was the occurrence of Hyundai motor competitor and hiring for its novel Czech factory. There was also the worry of workers switching to the latest factory. Turnover was the main subject for the company. The company faced cultural and language obstacles from Japanese, French and Czech. Dealt with two company cultures with diverse histories and making systems. Economic doubt, high joblessness and escalating fuel prices, had led to volume gains in this division (Kanter, p.15). The company’s strategies applied and other mechanisms applied are of significance towards the promotion and increase of the turnover. For the globalized industry, there is no easy resolution to the overwhelming economic problems that have impacted its wellbeing. What is quite clear is that the automobile industry is in the middle of a deep worldwide depression. And while considerable reason for their distress lies with extremely poor business resolutions and strategies, the leaders of the car production industry are doubtless right in claiming that their demise would bring about severe penalties. Unfortunately, there may be no other way, as the matter may ultimately come to a miserable who becomes bankrupt first; the automobile industry or the sovereigns being requested to bail them out. The question to be asked at this juncture is “how many small automobile producing companies will get extinct during the economic crisis”. The worst is yet to come as the economic crisis is picking up speed in its destructive impact on the world’s economy and the worldwide financial systems. It is important that world leaders put in place measures to curb this economic crisis before it does more destruction on our economy. In conclusion, the economic crises have affected in equal measures both the giant companies in the automobile industry (such as Toyota) and small companies. Other factors, which have affected the automobile industry, include environmental regulations and changes in consumer perception. Environmental regulations have affected the automobile industry because they have forced the car manufacturer to incur additional costs so as to produce environmentally friendly cars. The smoke emissions from cars plying roads in developed countries are very low. This is because it is against the environmental regulations to drive cars which pollute the environment. The change of customer perception in the automobile industry is another factor which has greatly affected the profits and operations in the automobile industry. A car consumer all over the world is starting to change their perception as far as their ideal car is concerned. More and more people are starting to order for liquid hydrogen powered vehicles because they emit pure oxygen and water burble; hence they are environmentally friendly. Our hope is that, soon, these liquid powered cars will be affordable to all people so that they can be bought in large numbers to replace the current carbon-dioxide emitting cars; hence, making the world a better place for the future generation. Works cited Arthur A . Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. New Jersey, McGraw-Hill, 2009 Jonas A & David C . PSA Peugeot Citroen-The Toyota of Europe. Paris, Morgan Stanley Company, 2005 Kanter, J . Toyota leads Asia drive in Europe. Tokyo, International Herald, 2005 Read More