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Toyota in Japan & Vietnam

BUS 417 International Business Section 4 . Toyota in Japan & Vietnam. Table of content:. I. Introduction of Toyota in Japan. Full name:  Toyota Motor Corporation(TMC) Headquarter: Toyota City, Aichi and in Tokyo President: Akio Toyoda ( 豐 田 章 男 )

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Toyota in Japan & Vietnam

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  1. BUS 417 International Business Section 4 Toyota in Japan & Vietnam

  2. Table of content:

  3. I. Introduction of Toyota in Japan

  4. Full name:  Toyota Motor Corporation(TMC) Headquarter: Toyota City, Aichi and in Tokyo President: Akio Toyoda (豐田 章男) Group companies: Toyota, Lexus, Daihatsu, Hino Establishment:  August 28, 1937 Investment capital:  397.05 billion yen Local employees:71,116 Total employees: 320,590 Business field:Motor Vehicle Production and Sales Introduction

  5. Production Plants in Japan

  6. Sub-company of the Mitsui Group(三井財閥) • Pioneer in developing Hybrid Motor Vehicle • - PRIUS Hybrid (established at 1997) • Just-in-Time production system • - Good aggregate planning on facilities & Capacity Toyota’s Competitive Edge in Japan

  7. Production Capacity: 1,327,000 vehicles

  8. I. Introduction of Toyota in Vietnam

  9. Full name:Toyota Motor Vietnam (TMV) Establishment:Aug5, 1996 (Official opening in Oct, 96) Investment capital:USD $89.6 million Business field: • Producing, assembling and selling Toyota vehicles • Repairing, maintaining and selling Toyota genuine parts • Exporting auto parts Introduction of Toyota in Vietnam

  10. Products: • Hiace, Camry, Corolla Altis, Innova, Vios and Fortuner (Locally-produced models) • Land Cruiser, Hilux (Imported models) Partner: • Toyota Motor Corporation (70%) • Vietnam Engine and Agricultural Machinery Corporation – VEAM (20%) • KUO Singapore Pte. Ltd (10%) Employees:Nearly 1,400 employees (including seasonal members) Top Management: • President: Mr. Akito Tachibana • Vice President: Mrs. Dang Phan Thu Huong Production Capacity:20,000 vehicles/year/2 working shifts

  11. “Moving Forward” together with Vietnam • Provided high quality products and perfect customer services • Contribute to the development of Vietnam automobile industry • Live and develop steadily and harmoniously Stable Development in Vietnam

  12. II. Global Attractiveness of Japan

  13. Area  -  Total 377,944 km sq. • located in a volcanic zone on the Pacific Ring of Fire. • 108 active volcanoes • Destructive earthquakes, often resulting in tsunamis Environment

  14. Population: 126,475,664 (July 2011) • 65.9 million workers (2010) • CPI:195,223yen/month(総務省平成21年全国消費実態調査) • Average Income level:301,578yen/month(総務省統計局平成21年全国消費実態調査) Demography

  15. The 3rd largest national economy • (nominal GDP ($4.338 trillion-4th) and purchasing power parity) • large industrial capacity motor vehicles,electronics,machine tools, steel and nonferrous metals, ships, chemical substances, textiles, and processed foods. Economic

  16. Economic Esp. 8 out of 100 workers are relating with automobile (Japan Automobile Manufacturers Ass- ociation, Inc., 2008)

  17. Export: the US, China, S. Korea, Taiwan, Hong Kong • Import: China, the US, Australia, Saudi Arabia, U.A.E., S. Korea, Indonesia -fossil and chemicals and raw materials Economic cont. • (Trade Statistics of Japan, 2010), (The US Central Intelligence Agency,2011)

  18. Ministry of Economy, Trade and Industry of Japan, 経済産業省: • discounted tax, substitution • low interest loan • international industrial technology exchange • enhance iron and fossil industries development • =>automobile industry • co-research of automobile strategies of next generation with those involved industries for maintaining theircompetitiveness Economic cont.

  19. Scientific research, particularly technology, machinery and biomedical research. • Nearly 700,000 researchers share a US$130 billion research and development budget, the third largest in the world. • Japanese technical managing methods: • 5S for a safer, more efficient, and more productive working environment • Just in Time,JIT for lower cost and lower place requirement Technology

  20. II. Global Attractiveness of Vietnam

  21. Political: Republic (single party state): Communistwas reasserted in all organs of government • President: titular head of state & nominal commander in chief of the military • (Vietnam People’s Army) VPA: involved in Vietnam's workforce to develop the economy • Good: Policy can be effectively achieved • Risk: result in Expropriation / Confiscation Vietnam (Socialist Republic of Vietnam)

  22. Economics: • 1986: Free Market Economy • 2006: WTO • Foreign Policy: Independence, self-reliance, peace, cooperation and development,openness and diversification and multi-lateralization of international relations. Proactively and actively engage in international economic integration while expanding international cooperation in other fields. • Product: Manufacturing, IT and high-tech industries ,oil business, Coffee, Rice, Tea, Rubber • Export Market: USA, ASEAN, EU, JP, CHINA • Import Market: ASEAN, CHINA, TAIWAN, JP, EU • Good: Encouraging Foreign Investment • Risk: Hyperinflation rate/ currency devaluation Source: http://www.trademag.org.tw/News.asp?id=525612

  23. Demographic: • Population: 85.8 million • Language: Mon- Khmer language (official national language) • English (Second language)Chinese and Japanese become popular • Education: literacy rate: 90.3% • large number of specialist colleges:develop a diverse and skilled national workforce. • Good: Provide an intensive workforce and without the barrier of language communication

  24. Legal • The National Assembly of Vietnam :legislature of the government; superior to both the executive and judicial branches. • The Supreme People's Court of Vietnam; the highest court of appeal in the nation • Beneath the Supreme People's Court stand the provincial municipal courts and the local courts. Military courts are also a powerful branch of the judiciary with special jurisdiction in matters of national security • Good: international cooperation can through the legal system to settle down industrial disputes

  25. Analysis and Conclusion

  26. Decision of Expansion

  27. Factors supporting Forward Trade in Japan Economic: • Purchasing power of Japanese is high • Current 2nd Large Market for Toyota Vehicles Geographic: - Earthquake and Tsunami destroyed many cars (Opportunity) “Demand on car in Japan will rise up in the future years”(Sun Daily, 2011) Japan - Forward Trade Source: http://en.wikipedia.org/wiki/Toyota Source: http://hk.news.yahoo.com/article/110311/3/n5rf.html#

  28. Marketing Mix: • Product: Focus on Low Price Car and Truck Series (Corolla, Yaris, Prius, Ractis and Tundra) • Price: Low Price with discounts • Place: All Toyota’s Car Dealers in Japan • Promotion: Sales Promotion and Trade-In (Motivate the victims of earthquake to buy a new car) Strategy for Forward Trade in Japan

  29. Factors supporting Backward Trade in Japan 1. Political: - Japan government strongly support the car manufacturing industry (Discount Tax, Low Interest Loan, International technology exchange) - Japan government may not allow Toyota to close most of the local plants (Protect Employment Rateas 8.1% workers are working in related industries) 2. Technological: • The technology development in Japan is in world leading level Japan - Backward Trade Source: http://www.jamabj.cn/industry/industry/industry_1g1.asp

  30. 3. Demographical: • There are many skillful worker in Japan • Around 5150000 workers working in car related industries 4. Other factors: • Able to serve local demands in a cost effective way (Minimize Transportation Cost) - Toyota developed a good manufacturing plants networks Source: http://www.jamabj.cn/industry/industry/industry_1g1.asp

  31. Modify Current Supply Chain and Operation Flow • Plants are concentrated in Aichi County (愛知縣) offshore region Strategy for Backward Trade in Japan South Offshore Region

  32. Modify Current Supply Chain and Operation: • Move offshore manufactories to inland area and other countries progressively (Prevent Tsunami Threat + Obtain Lower Production Cost) - Relocation of Distribution Centers in Japan (Facilitate Export and Import under new arrangement) • Maintain Research and Development Department in Japan (Utilize the Technological Advantages)

  33. Economic Factors supporting Forward Trade in Vietnam - Two way Trade is 160% of GDP 1 - Toyota is the current Market Leader in Vietnam - Vietnam Government supports car manufacture industry - High Market Potential (Vietnamese’s Income Increasing) 245%automobiles sales growth rate at 2008 2 - Hyperinflation rate Vietnam- Forward Trade Source 1: http://en.wikipedia.org/wiki/Vietnam Source 2: http://tw.asiamachinery.net/exhibition/detail.asp?Exhibition_Code=FAUTHCM2010&Country_Code=VN&Category_Code=AUT

  34. Product: Focus on developing Low Price Car Series with less technology involved Price: Cost leadership strategy Place: Increase the numbers of sales channels Promotion: To create the needs of brand new car rather than motorbike and second hand car Methods: Sales Promotion, Discounts and Advertising Strategy for Forward Trade in Vietnam

  35. Factors affecting the backward trade in Vietnam • Obtain Low Production Cost and Labor cost (Japanese average income : Vietnamese average income = 8:1) 1 • Receive Government Supporting- -Launched “Development Strategy of Automobile Industry 2010” -Low Interest loan rate 3% per year & long credit period with 12 years 2 • Intensive workforce with no barriers of communication Vietnam- Backward Trade Source 1: http://en.wikipedia.org/wiki/Vietnam Source 2: http://tw.asiamachinery.net/exhibition/detail.asp?Exhibition_Code=FAUTHCM2010&Country_Code=VN&Category_Code=AUT

  36. Factors affecting the backward trade in Vietnam -Enjoy benefits of joining WTO Free Trade Environment Tax deduction -Able to serve local demand on cars Lower transportation cost Demands for automobiles parts > US $9.58 billions at 2009 1 Vietnam- Backward Trade Source 1: http://tw.asiamachinery.net/exhibition/detail.asp?Exhibition_Code=FAUTHCM2010&Country_Code=VN&Category_Code=AUT

  37. Backward Trade: • Exploit Rare Earth Metals (稀土) -for Engine or Parts • Maintain “Guan Xi” with Vietnam Government & chief of the military • Increase the capacity of Vietnam manufacturing plants to attain economics of scales for lower production cost Strategy for Backward Trade in Vietnam

  38. Sun Daily. (2011, 3 13). Japan Big 3 Car Manufacturers Stop the Production. Retrieved 3 13, 2011, from on.cc: http://the-sun.on.cc/cnt/news/20110313/00407_028.html?pubdate=20110313 • 李秉璋(2010)。「日本次世代汽車戰略2010」要點剖析。取自 http://cdnet.stpi.org.tw/techroom/analysis/2010/pat_10_A015.htm • Hiroyuki Hirano(2003). The 5 'S' Process: Seiri, Seiton, Seiso, Seiketsu, Shitsuke。Retieved from http://www.siliconfareast.com/5S.htm • 総務省統計局(2010)。総務省平成21年全国消費実態調査。取自 http://www.stat.go.jp/index.htm • 日本汽車工業協會(2008)。汽车关联产业与就业人口。取自 http://www.jamabj.cn/industry/industry/industry_1g1.asp • 亞洲機械網(2010)。越南國際機車暨零件展 • http://tw.asiamachinery.net/exhibition/detail.asp?Exhibition_Code=FAUTHCM2010&Country_Code=VN&Category_Code=AUT • 全球台商E焦點(2010)。越南重點產業發展政策對台商的影響 • http://twbusiness.nat.gov.tw/epaperArticle.do?id=37617671 • 萬福研究部(2008)。越南制定到2010年汽車工業發展戰略 • http://www.maxford.com.hk/doc/2008-02-20-02.pdf • 星島環球網(2007)。越南成了投資寶地香港企業摩拳擦掌去撈金 • http://www.chinawealthplanning.com/index.php?option=com_content&task=view&id=1032&Itemid=32 • Wikipedia (2010). Vietnam • http://en.wikipedia.org/wiki/Vietnam • http://www.trademag.org.tw/News.asp?id=525612 Reference:

  39. The End

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