Analysis of Toyota Corporation

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Exercise 4: Assessment of Toyota’s Current Regional Production Strategy; North America
During the 1960’s the United States began to place stiff taxes on imports which caused a stir among European automobile manufacturers. This heavily impacted their market. In order to manufacture cars locally and avoid U.S. import tariffs, Toyota built its first manufacturing facility in North America in 1972 in Long Beach, CA. Following in 1985, a second facility was erected and opened in Canada. It wasn’t until 1988 however that manufacturing facilities were built to both manufacture and sell cars. The first two facilities opened in 1988 and were located in Ontario, Canada, and Kentucky respectively. Currently there are two facilities located in Canada, ten in the United States, and in 2002 Toyota opened their first manufacturing facility in Mexico (Toyota, nd).
The Japanese exchange rate was a major factor that needed to be considered when moving production facilities to North America. During the 1970’s, the YEN was at an all-time low following the 1973 oil crisis. During the 1980’s the YEN failed to climb, but in the 1990’s the YEN reached its peak in 1995.
An evaluation of the production facilities currently located in North America finds the TMMC (Canadian manufacturing facility) to be among the top 5 global manufacturing plants. They produce over 500,000 vehicles annually. Next the North American facilities combine to produce 1,644,661 vehicles last year, and have 10 operating plants. They spend 1 million dollars annually on R&D, have created 365,000 jobs, and produce 9 models of Toyota vehicles. The North American plants have received significant investment from Toyota and are operating exceptionally well.

Our team believes that Toyota has chosen to produce vehicles in North America in this current fashion for several reasons. There are currently 10…...

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