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1、Toyota Strategy for Chinese Market,CM130227 Bongsoo KangCM130242 Noboru NishiharaCM140204 Kensyo UchidaCM140234 Fan Xiaoyu,Contents,2,Intro,Industry Analysis,Strategy Review,Conclusion,Profile,3,(USD million),IncreasingRevenue Stably&RecoveringProfitability,Importance of China Strategy for Toyota,4,
2、China became the most attractive market in the automotive industry,Market Size(Unit):China 17.3mn US 15.4mn Japan 5.0mn(cf.Europe 17.8mn)Penetration:US 919 W.Europe 613 Japan 545 China 64 Overall market attractiveness:China&US are high,but Europe&Japan are low,Attractiveness of Market,Global Value C
3、omparison,5,(1,000 unit),*source:Best Selling Car,2013 Automobile Company Rank,2013 Global brand sales in china,Toyota has low position in China comparing VW,Toyota has competed against VW on even position in the world-Toyota was ranked N0.2 of Automotive Brand by Forbes in 2013 However,Toyota is on
4、 a sticky wicket in Chinese market-Toyota only sold 857k units but TW sold 2,395k(about quadruple)in 2013 Therefore,it is very important for Toyota to set-up the strategy of Chinese market,Contents,6,Intro,Industry Analysis,Strategy Review,Conclusion,New entrants,New entrants,New entrants,substitute
5、sRent-a-carleaseCar sharing、autobiketrainUsed car dealer,complementCar accessory shopinsuranceoilNext generation standairplane,Corporation,Individual,Suppliers,Motor Vehicle,Buyers,Buyers of buyers,ordinary,Largeincomeearner,Lowincomeearner,Transportindustry,Sports carTVR、Ferrari、Maserati、Lamborghin
6、i,Tradingcompany,DealerPT ASTRA INTERNATIONAL TBKSIME DARBY BERHADJARDINE CYCLE&CARRIAGE LTDAYALA CORPORATIONHotai Motor Co.,Ltd.BRILLIANCE CHINA AUTOMOTIVE HOLDINGS LIMITEDAutoNation IncINCHCAPE PLCPenske Automotive Group IncIMPERIAL HOLDINGS LIMITED Group Holdings,Suppliers of suppliers,New entran
7、ts,Motor Vehicle Industry,5 Forces in Details,8,5forces analysis,9,Industry CompetitorsIntensity of rivalryHIGH,Suppliers,New entrants,Buyers,Substitutes,Threat of new entrantsLOW,Bargaining power of buyersLOW,Threat of substitutesNORMAL,Bargaining powerof suppliersLOW,According to 5forces analysis,
8、profit potential of motor vehicle industry is basically high.,PEST analysis in China,10,Political Factors,Economic Factors,Social-Cultural factors,Technological Factors,Chinese Communist Party(One-party dictatorship)Worsening of sentiments towards Japan in China,danger of extreme demonstration Colla
9、boration between companies with Communist Party(using bribery)Strict regulations of automobile industryStrengthening of emission regulations for diesel vehiclesProposed regulations in improving fuel efficiencyAutomobile purchase limit policy in order to alleviate traffic congestion problems(Shanghai
10、&Beijing)Beijing winning probability of 2%Exemption of vehicle-number plate lotteryPurchase incentives in Beijing,Economic growth recessionHigh growth in automobile industryAmplification of wage gapEmployment insecurity among youngstersIncrease in labor costsNet exchange rates policyConcern of prope
11、rty bubble burstEnvironmental problemsWithdrawal of foreign-invested companies(factories)Slow development of Chinese local companies,One-child policyAcceleration of aging population with falling birth rateDemographic shift caused by migration from rural to urban areasInadequate welfare and pension s
12、ystemBuying behavior varies according to age groups(Before and after 1980s)Conspicuous consumption due to culture of being appearance-conscious(not so significant recently)Public amenities are still not so readily availableDiversification of judgment valuesJapan-made products are perceived as high-q
13、ualityIncrease of imitation products in the market,Usage spread of InternetEase of accessibility to worldwide information via SNS development(Weibo etc.)Development of E-commerce(Alibaba)Development of fuel-cell technologyImprovement in traveling distance of electric vehiclesUsage spread of Fuel-Cel
14、l VehiclesPromotion of modular usage in automobiles(Commoditization)With the minimum proper technology,it is possible to produce automobiles with decent functionalities,Contents,11,Intro,Industry Analysis,Strategy Review,Conclusion,New Entry Strategy of VW in China,VW entered Chinese market early in
15、 1985.So VW got a first mover advantage.,To get capital and technology,Chinese Government asked Western and Japanese companies to corporate with them in 1970-.At first,because of poor quality of parts,VW sold the cars that ware produced in Brazil and South Africa.So even 2000,VW sold just 4 model,bu
16、t VW has taken the first place in ordinary car market.,VW,1985,2003,Seventh five-year project,Auto mobile development policy,1994,1986-1990,Time axis,1997,GM,1999,Honda,1970s-,Tech-tradepolicy,Toyota,12,New Entry Strategy of Toyota in China,On the other hand,Toyota started production in China lately
17、 in some reasons.,But Toyota didnt start to produce cars in China,instead Toyota sold cars as imported.Therere some reasons.First,Toyota was busy in Japan-US trade friction.Second,Toyota was afraid of leakage of technology.Third,because of foreign exchange shortage,if Toyota launched production,they
18、 couldnt buy parts.,VW,TOYOTA,1985,2003,Seventh five-year project,Auto mobile development policy,1994,1986-1990,Time axis,1997,GM,1999,Honda,1970s-,Tech-tradepolicy,13,Simulation of Diamond ModelWhy couldnt Toyota enter China as early as VW?,Market similarity,Comparativeadvantage,Regulation,ScaleSco
19、pe,In 1985,compared with VW,Toyota wasnt good enough to enter Chinese marketBut in 2003,bigger market scale and deregulation,Toyota entered the market.,2003,1985,1985,14,Sales amount of Toyota and VW in China,Recent gap cannot be explained by first mover advantage.,Gap by first mover advantage,Gap b
20、y what?,15,CAGR,16,Toyotas Strategy,Lean Product System(LPS),Lapping of an automobile is said to be an important integral type of product.Toyotas strong point is operating and producing well.Lean production is an assembly-line methodology.Lean production principles are also referred to as lean manag
21、ement or lean thinking.,Main Product Strategy,Their main product lines are Prius,Lexus and Camry.,BUT Prius hasnt been popular.One reason is the price(Prius was imported until 2011)Lexus doesnt have high brand image that for example Audi and BMW have.As the result,main products of Toyota are selling
22、 slowly.,17,VWs Strategy,Modular Matrix Strategy,Conventional platform system and components are modularized,along with improvement in architecture in order to produce and develop various brands and different types of vehicles Varies a little from Toyotas lean production system,Multi-brand Strategy,
23、Owns 12 full-line brands as part of their multi-brand strategy including commercial-use vehicles,mass community and premium brands such as Bentley,Lamborghini,Porsche and AudiEnhancement in competitiveness in terms of marketing brand designAcquisition of Italian design department in order to increas
24、e strength of brand,VWs Modular Matrix Strategy(MQB),18,Multi-brand Strategy,19,Brand Portfolio,Summary of ToyotaVWs Strategy,20,Competitive advantage,Contents,21,Intro,Industry Analysis,Strategy Review,Conclusion,Toyotas Strategy for China(2015),22,Goal Sales of 2 million cars in 2020,twice of the
25、sales in 2014,Implementation Plan,Estimation of Goal,(Unit:10,000),Registration about environment like CO2 restrictions increase Expand and accelerate the local production of HEV,Existence of growth potential in the west market Promotion of mid and low-end cars in the west market,Growing income&Desi
26、re for leisure increase Commit new high-end SUV models to meet demand,Risk of nationalism is not disappear Provide free insurance for cars damaged by nationalists,Question Is it sufficient for Toyotas strategies to achieve their goal?,SWOT analysis,23,S,W,O,T,Toyota,Volkswagen,Global,China,1.Global
27、Presence(including China)2.Strong Brand Portfolio3.Synergy Power by M&A,1.Decrease the Reliability of Quality by Large Recall2.Weak Presence in the Emerging Market(including China)3.Regional Production Capability is Restricted(US and Japan)4.Weak Brand Power&Portfolio in Premium Car Section,1.Weak P
28、osition in the US2.Most cars are not environment friendly,1.Positive Attitude towards Green Cars2.Increasing Fuel Prices3.Changing Customer Needs4.Growth through Acquisitions,1.New Emission Standards2.Rising Raw Material Prices3.Intense Competition4.Economic Crisis,1.Largest Market in the World2.Pos
29、sibility to Increase Demand by Low AutomobilePenetration Rate(comparing Matured Market)3.Positive Attitude towards Green Cars4.Government Reduced Automotive Taxes,1.Problem to Manage Quality and Transfer Technology Skill 2.Possibility to Leak Core Technology 3.Strong Government Power(Regulation&Rela
30、tionship)4.Economic Slow Down 5.Increasing Labor Cost 6.Increase the Needs of Module Process,1.Innovative Culture2.Strong Brand Reputation3.Industry Leader in Product&Management4.Various Portfolio5.The Leader in Green Cars Development,S,W,O,T,SWOT strategies for Toyota in China,24,1.Decrease the Rel
31、iability of Quality by Large Recall2.Weak Presence in the EmergingMarket3.Regional Production Capability is Restricted4.Weak Brand Power&Portfolio in Premium Car Section,1.Largest Market in the World2.Possibility to Increase Demand continuously3.Positive Attitude towards Green Cars4.Government Reduc
32、ed Automotive Taxes,1.Problem to Manage Quality and Transfer Technology Skill 2.Possibility to Leak Core Technology 3.Strong Government Power 4.Economic Slow Down5.Increasing Labor Cost6.Increase the Needs of Module Process,1.Innovative Culture2.Strong Brand Reputation3.Industry Leader in Product&Ma
33、nagement4.Various Portfolio5.The Leader in Green Cars Development,Product&Price Strategy Increase Presence by Offering Cost-efficient Products(S1,S3,O2,O4)Penetrate Market by Offering Customer Oriented Products(S2,S3,S4,O1,O2)Reinforce investment of Green Car(S5,O3),Promotion Strategy Recover the Im
34、age of Superior Quality by Test(W1,W2,O1,O2)Investment Strategy Build Production Capability by Local Investment more(W3,O1)Product&Price Strategy Get a High Value by Offering High-end products(W4,O2,O4),Production Strategy Reinforce Manpower by Conducting Education Program(S1,S3,T1,T3)Preserve Cost
35、Leadership by Process Innovation(S1,S3,T4,T5),Production Strategy Conduct Two-track Strategy depend on a kind of Product(W2,W3,T2,T3)Premium&Green Car:Japan Low&Mid-end:China Survey Suitable Region instead of China for Production(W2,W3,T4,T5),Schedule Plan,25,Effect,Time Schedule,Small,High,Short-te
36、rm(2015),Long-term(2019),Mid-term(20162018),Premium Model,Hybrid Model,FCV Model,Mid-end Model,Low-end Model,Invest to China,Survey Suitable Region instead of China,Reinforce Promotion by Quality Test,Reinforce Manpower by Education&Process Innovation,It is available to separate strategies by“Effect
37、&Period”,Effect-down,Lost by Chinese player,Lost by Chinese player,In terms of product&price strategy,its effect is depending on the sort of cars.It is important to change Chinese reception about Toyotas weakness shortly.(Promotion),Strategy Type,Recommendation,26,Toyota should focus Risk Mgmt&Compl
38、ementary Strategy additionally,Risk Management:Product&Political risk are critical issue Complementary Strategy:Toyotas Promotion&Production strategy are not sufficient Promotion Strategy Production Strategy&Product Mgmt Political Mgmt by 3 criteria,Risk Management,Complementary Strategy,Product Sid
39、e Pool quantity of vehicle Increase a sort of line-up Threaten of PHEV by VW Increase marketing action and R&D,Political SideThe existence of nationalism Adopt a policy of China friendly(e.g.Education),Promotion StrategyReinforce actual test about quality improvement,then give the result publicity t
40、hrough media(CM or documentary),Production StrategySpread out Toyotas innovate culture through education program(e.g.TPS,LPS,Kanpan system),criticality,urgency,practicality,criticality,urgency,practicality,criticality,urgency,practicality,criticality,urgency,practicality,NORMAL,NORMAL,LOW,HIGH,NORMA
41、L,NORMAL,HIGH,HIGH,HIGH,NORMAL,NORMAL,HIGH,Appendix,27,Appendix,28,【6Forces】既存企業間対抗度,【6Forces】新規参入脅威,31,【6Forces】供給業者交渉力,【6Forces】買手交渉力,【6Forces】補完財脅威支援,【6Forces】代替品脅威,34,Market Similarity,Demand increases at rapid speed,mostly by growth of consumers income.Still,cars are considered as asset rather
42、than commodity.Prices of cars are comparably stable by looking at numbers.However,due to income increase,the real price is becoming cheaper to consumers.Consumers prefer sedan and larger ones.(This point is more like German),Scale and Scope,Sources to production are abundant,including local basic fa
43、ctories to cooperate with,and low cost labor.Large potential consumers exist.(1/10 of America and 1/5 of Japan)http:/en.wikipedia.org/wiki/List_of_countries_by_vehicles_per_capita,Comparative Advantage,Toyota:high cost performance,highly advanced technology(ex.Hybrid)VW:module line,a good reputation
44、,highly advanced and matured technology（ex.Infinite variable speeds）,good and stable relationship with China,Regulation,Generally open.Extremely high tariff to imported cars forces companies to realize local production.As the dominant policy background,foreign for automobile makers to enter Chinese
45、market,they have to establish a joint capital corporation with a local producer,which is called technology exchange for market.,中国戦略,中国進出1997年上海汽車戦略的締結上海設立。飛躍的拡大、乗用車市場成長始2002年以降。供給面上海汽車提携関係強化。中国市場高級中大車好売特徴、2002年以降急成長支中間所得層、彼帰投入急。韓国大宇自動車買収、不得意小型車開発担狙。,中国戦略,多様生産、各生産拠点周辺集積。上海部品調達過去韓国輸入。着実部品調達先中国国内増。幸社内
46、選好上海多数存在。先進環境技術車両開発拠点勝最重要市場位置付。具体的戦略題、協力車2008年市販化2011年以降車投入計画。,中国戦略,太平洋地域105万台（2007年）中国91（構成比）事業中核中国。中国進出1985年早期。当初中国国内部品改良進、南生産上海一汽中国市場改良市販化2000年投入、競合数多計万台販売実現、乗用車市場常第一位獲得。,中国戦略,中国総投資額億漸近的投資競合押低下避。市場拡大中年中国市場初赤字出。年接客的設備投入挽回狙。同年末計画発表両合弁間製品差別化新投入（以降年間）強化、部品現地調達比率引上削減実施同時開発能力強化。,中国戦略,地位維持、年以降積極的事業展開実施、
47、抜結果。今後事業展開懸念開発能力強化。年月上海新型車発売。開発中国人技術者中心行、特中国人消費者好合。微妙変化販売不調環境技術重視戦略。採用、原油精製技術高不良原因、軽油同値段小排出量車変速早組合普及目指。,中国戦略,中国年車輸出始。日本国交回復後年代技貿政策、日野経営技術者第一汽車北京汽車訪問車両機械設備輸出生産管理指導。年年一万台超輸出言。同時需要増広州生産少量開始。、完成車輸出道路未整備必要、北京広州技術開設。,中国戦略,経緯、中国政府技貿政策一歩進技術提携生産企業設立日欧米要請、話合不調和終。以降車両生産関範囲中国事業展開、年金杯汽車技術援助契約締結。今中国政府要請十分、欧米対出遅感否
48、、当時振返米国車輸出日本主導的進貿易摩擦対応追。当時中国外貨不足時代生産立上部品買外貨状況、十分成立。,中国戦略,、年生産参入認、四川設立年生産開始。乗用車生産年天津設立許可。年第一汽車包括的提携関係構築生産拠点整備、投入数増。今後年米国匹敵生産能力整計画。中国商品販売戦略市場多様化従販売構築。,中国市場,急進的事業展開支、完成車事業早期進部品事業展開。中国晴雨年公布汽車工業産業政策盛込部品産業育成重視、部品生産可能裾野産業設備進。、豊田合成系列同年転身中心進出、年党則生産会社、翌年鋳造部品生産会社設立。狙広州実施広汽設立前生産会社設立。,中国戦略,環境技術戦略、世界先行技術中国展開。年車現地
49、生産開始、日本米国人気。,Part A,Part B,Part A,Part B,Modular,Integral,VWs Strategy,Toyotas Strategy,Lapping of an automobile is said to be an important integral type of product.Since VW can never surpass Toyota(superior in operations systems)as long as their products are of integral type,VW made an effort to ch
50、ange from integral type to modular type.,VWs Platform Strategy,Difference between Integral and Modular,Integral,Modular,Closed,Open,(Enclosed),(Industry Standard),E.g.:Passenger automobile Bike Software games,E.g.:Computer Package software Internet products Bicycle,E.g.:Mainframe Machinery Lego,Toyo
