The Global Automotive Industry – who benefits and who loses? Toyota

Дата канвертавання21.04.2016
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The Global Automotive Industry – who benefits and who loses?


Toyota Motor Company set up manufacturing plants at Toyota City near Tokyo with important engine, transmission and body stamping plants close together with suppliers, such as steel and components in close proximity. Recent plants were constructed away from Toyota City to take advantage of lower land and labour costs.

All plants at Toyota City unless specified.



Honsha- Trucks and Buses


Motomachi - Cars


Takaoka – Cars


Tsutsumi – Cars


Tahara - Cars


Kyushu (not Toyota city) Cars



Kamingo - Engines


Myoshi -Chassis components


Myochi – Engine and Chassis parts


Shimoyama – Engines and Exhausts


Kinu-ura – Components




Hirose – Electronic components


Hokkaido (not Toyota City) Parts

In Toyota City the Toyotist method of manufacturing was developed with JiT, quality control, work teams, zero defects etc. By the early 1980s Toyota could produce reliable, competitive and high quality cars for world markets but protectionism in the two biggest markets was limiting access. In addition Toyota was beginning to be affected by relatively high labour costs in Japan and a saturated domestic market.


1984 – large integrated car plant constructed in Fremont California USA (joint venture with GM).

1988 – plant built in Kentucky USA and a second plant built 1994.

1988 – plant built in Canada

1989 – plant built at Burnaston near Derby UK

1996 Regional HQ built in Cincinnati USA

1997 – Plants built in India, Brazil and Argentina

1998 – Plants built in West Virginia and Indiana (USA) and a forging plant in China.

2001 – Second European plant in Europe – N France

Toyota product development

In Japan

Head Office Technical Centre Toyota City 1954

Higachi-Fuji Technical Centre 1966

Shibetsu Proving ground 1984

Central Research and Development Laboratory 1960

Outside Japan

Toyota Technical Centre – California

Toyota Design Research – Detroit

Toyota Technical Centre – Europe Brussels, Belgium.

Toyota Office of Creation – Europe.


Nissan was the first Japanese company to build a car plant in Europe at Washington on Tyneside. This factory has consistently been the one with the highest productivity in Europe, approaching Japanese levels. Nissan is now joined with Renault and there was a danger that the new Micra would be built at a Renault factory in France due to the high value of the pound but with Government aid and component suppliers bearing much of the exchange rate costs by using the Euro for purchasing the new Micra will be built at Washington. Without its very high level of productivity, (Toyotist methods) and tie in with suppliers it is unlikely that the Washington plant, as a branch plant away from the Renault core areas would have survived.

The combination of Renault and Nissan was necessary because Renault had little production outside Europe and was losing French Government support as the EU began to curb Government aid to industry. Nissan faced overcapacity in its domestic market and needed the design flair of Renault as its cars were not selling well in Europe and the USA. Nissan was attractive to Renault as it had engineering skills, access to the Japanese (and Asian) markets and also had plants in North America. Thus Renault could go global. In Japan the Nissan car and components plants were rationalised to reduce overcapacity (Renault also closed a plant in Belgium) and the Nissan products redesigned using Renault expertise.
Nissan North America

Initial investment began in 1966 in Mexico where Nissan now has two plants at Aguascalientes and Cuernavaca . In the USA it has a plant at Smyrna near Nashville Tennessee which began production in 1983 but has seen considerable expansion since and now produces vehicles, axles, engines, fascias. There is also an engine/gearbox/transmission plant at Decherd (also Tennessee). In 2001 Nissan began construction of a new plant in Canton Mississippi chosen because the site had access to “high quality workforce, a good site and infrastructure, business climate, excellent cooperation and commitment from the State, local and Federal levels”. Nissan’s capacity in North America is 1.15m vehicles per annum.


Hyundai is a Chaebol in Korea with a range of interests such as steel, ships, electronics, consumer goods. The Hyundai motor company was started in 1967 with Ford UK providing the technology and expertise. In the early 1970s Hyundai began to produce its own car the Pony for its domestic market. (Small, cheap and low tech for the emerging economy.) In the 1980s Hyundai developed into a high volume manufacturer at its Ulsan plant and began to export vehicles to Europe and the USA. By the mid 1980s the company was selling cars in Canada and Europe and the US. In 1991 it produced its first engine – the alpha (previously it had used end of life cycle designs from other manufacturers). In 1995 it opened a research centre at Chonju and in 1996 a Research and Development centre at Namyang was completed. In 1997 aa auto plant in Turkey was completed. The collapse of the Asian bubble in 1997 and its effect on South Korea led to significant overcapacity and as a result Kia was taken over in 1998 and in the same year an auto plant in Chennai India was opened. With limited scope for expansion in its domestic market, rising wage rates and protectionist measures in the US Hyundai needed to develop production facilities abroad which it announced in April 2002 with a new plant in Montgomery Alabama.

Other snippets

Fiat set up a 50-50 venture with Yuejin motors China to build a light truck plant in 1999. Fiat provided the capital ($60m) to finance the venture which the Yuejin could not afford. China is a huge and rapidly growing market with huge potential demand for light trucks and cheap labour. End of life cycle Fiat technology will be robust enough for Chinese conditions and within the technology of Chinese manufacturing. Fiat is only important in Europe and needs to develop a Global reach if it is to have a long term future. It wanted to buy Volvo but lost out to Ford and there are recurring stories in the motoring press that Ford are keen to buy Fiat. (Fiat has a long history of selling production lines to FCCs, LADA in Russia, Polski in Poland, Yugo in Yugoslavia for example were all based on the Fiat 124, 128 and 127 models.
BMW has chosen Malaysia as its regional centre for operations in Asia alongside its existing centres in Munich and the USA. Reasons given for the choice of Malaysia include political stability, a growing economy, educated workforce, high levels of productivity. In addition BMW will be able to take advantage of the ASEAN free trade area where after 2005 automotive tariffs will be removed or significantly reduced

Stephen Smith

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