Futon RamboFINC 677TOYOTA MINI-CASE STUDYQuestion 1: why do you think Toyota waited so long to move much of its manufacturing for European sales to Europe?Toyota delayed its decision to move manufacturing for European sales to Europe because of several factors. The market conditions prior to the falling value of the Euro indicated potential for expansion and growth even without a manufacturing facility. Despite only 24% of European sales being manufactured from its four facilities in Europe by 2001, Europe was Toyota's second largest foreign market in 2000. Hence, Toyota Motor Europe Manufacturing (TMEM) expected an expansion of its European sales from 634000 to 800000 units by 2005 (Eite ...view middle of the document...
In fact, the yen's dominance over the two currencies would have provided TMEM the opportunity to exploit the exchange rate differences by receiving the manufacturing funds from Japan while protecting TMEM's margins from the adverse effects of the declining Euro.Question 3: If you were Mr. Shuhei, how would categorize your problem and solutions? What was a short-term problem? What was a long-term problem?Shuhei faced a number of interrelated problems including the declining value of the Euro against Toyota's cost-base currency (the yen), the lack of a manufacturing facility in continental Europe and the acquisition of key subcomponents from local European markets. Of these, the acquisition of key subcomponents from local European markets was a short-term problem because Britain is not the only European market capable of providing the desired subcomponents. German manufacturers have the technological prowess to provide the subcomponents for TMEM's subsidiaries in continental Europe. Changing the cost-base currency used from the yen to the euro would require the upgrade of the current assembling facilities in continental Europe into manufacturing facilities that are not dependent on receiving key subcomponents to manufacture popu...
