Toyota international business - Essay Example

The decision to operate and expand in Poland compared to other EU countries is dependant on a lot of factors, however we can look at some major aspects of investment decisions. Poland has been one of the most successful transition economies of the last decade thanks to consistently sound economic policies (DTI). It has consistently produced growth in GDP which slowed down in 1999-2000 which was mitigated with the prospects of closer integration with EU. Poland has dynamically converted from state capitalist economy to privately owned market economy.

Even though conversion to private market economy and focus on EU increased consistency in economic policies, unnecessary red tape still needs to be eliminated. However until Poland joins the Eurozone, which is expected approximately by 2010, companies operating in Poland will be exposed to foreign currency risks. Considering the stringent requirements that have to be met in order to become a member of EU e.g. trade deficit of less than 3% and maximum government public debt of 60% of GDP, it is expected that until Poland joins Eurozone, the exchange rate will be stable enough so as not to effect investment and trade decisions by companies such as Toyota.

Since the establishment of European Union and introduction of Euro, economic environment has dramatically changed. The EU represents a market of over 450 million people with minimal barrier’s to trade and movement of factors of production. The market size is expected to be effected due to inclusion of new member states into EU, however it is expected to normalize and increase by 2010 (DTI) and not only provide a larger target market but also skilled human resource – which is available at competitive cost compared to other European countries.

Owing to the market size and purchasing power of the consumers, Toyota has posted 12% YoY increase in sales in