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Toyota Motors Corporation in the Different Aspects of the Chinese Market: Regulations and Competition - Research Paper Example

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The aims and objective of this paper are to precisely analyze the different modes of entry of foreign multinational companies in China. A study of different theoretical frameworks has been undertaken to investigate the economic differences amongst the modes of entry…
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Toyota Motors Corporation in the Different Aspects of the Chinese Market: Regulations and Competition
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Download file to see previous pages The Chinese law requires a foreign company to form joint ventures of not more than 50% shareholding if it wants to engage in production activities in China. Toyota Motors have no option other than entering into a JV. However, it can and as well, has gone for 100% ownership in manufacturing auto ancillaries. China has contributed significantly to Toyota’s global growth. One difference that can be clearly identified is the export potential; while Toyota Motor Thailand Company Limited has a huge earning from exports of completed vehicle unit and ancillary parts, The Chinese division lags in production. In fact, to cater to the high demand, cars had to be imported from Japan. We can thus comfortably draw a conclusion that the Joint Venture model is a reliable one when it comes to performance. As regarding the export, Toyota is planning to open up new plants in China that are expected to be operational from 2010. The subsidiary mode is best suited when it comes to manufacturing of components. This is of particular advantage since it will facilitate the implementation of the famous Lean practices of Toyota and also ensure that quality is maintained that is, till today, the hallmark of what Toyota is. China is perhaps the greatest market of the world…..although regulations are strict… we expect the credit crunch to disappear with its effect from China sooner than it does from other parts of the world. To be very specific, we plan here to stay…and do good business. The mass market of China is unique in itself, but at the same time pretty interesting as well. ...Download file to see next pages Read More
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