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ABDM3234 - International Business Planning Tutorial 9: Case Study Question Toyota To Stop Making Cars in Australia

Toyota announced it will stop car production in Australia by the end of 2017, joining other automakers like GM and Ford in exiting the country. This will eliminate over 2,500 jobs and further damage Australia's auto industry. High costs and a strong currency have made the country unattractive for manufacturing. While Toyota tried transforming its business, external factors like industrial relations made continued production unviable. The exit is a blow to the Australian government as it tries to manage an economic slowdown following a mining boom.

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47 views2 pages

ABDM3234 - International Business Planning Tutorial 9: Case Study Question Toyota To Stop Making Cars in Australia

Toyota announced it will stop car production in Australia by the end of 2017, joining other automakers like GM and Ford in exiting the country. This will eliminate over 2,500 jobs and further damage Australia's auto industry. High costs and a strong currency have made the country unattractive for manufacturing. While Toyota tried transforming its business, external factors like industrial relations made continued production unviable. The exit is a blow to the Australian government as it tries to manage an economic slowdown following a mining boom.

Uploaded by

preetimutiara
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ABDM3234 International Business Planning

Tutorial 9
Case Study Question
Toyota to Stop Making Cars in Australia
MELBOURNE Toyota Motor said Monday it would stop making cars and engines in
Australia by the end of 2017, which would cause the loss of thousands of direct and
indirect jobs.
Toyotas decision follows the planned exits of General Motors and Ford Motor,
announced last year, and would leave no global automaker remaining in Australia as
high costs and a strong currency make it an unattractive place for manufacturing.
We did everything that we could to transform our business, but the reality is that
there are too many factors beyond our control that make it unviable to build cars in
Australia, Toyota Australias president, Max Yasuda, said in a news release.
About 2,500 jobs will be affected when the plant shuts down in 2017, the company
said.
Toyotas exit from Australia after more than half a century deals a further blow to
Prime Minister Tony Abbotts conservative government, which is seeking to manage
a slowdown in the $1.5 trillion economy as a decade-long mining investment boom
slows.
A pullout by Toyota had been widely feared because of the blow to the parts supply
base caused by the flight of General Motors and Ford.
Its a huge moment for industry in Australia, Industry Minister Ian Macfarlane told
reporters in Canberra after Toyotas announcement.
Toyota had made no requests to us other than express their frustration with the
difficulty they were having with the industrial relations process, he added.
Australias car industry includes about 150 companies working in sectors like
component making, tooling, design and engineering, with more than 45,000 people
employed directly in the car and parts-making sectors, according to government
data.
Vehicle production in Australia has fallen by nearly half in the past decade to just
above 200,000 units in 2012, from more than 400,000 in 2004. Sales of locally
made vehicles have suffered in recent years as a stronger Australian dollar makes
imported cars more competitive.
In contrast, global automakers have been building new factories and increasing
capacity in countries like Indonesia that have growing middle classes and lower
costs.
Source: Adapted from REUTERS, 2014. Toyota to Stop Making Cars in Australia
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February,
2014
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http://www.nytimes.com/2014/02/11/business/international/toyota-to-stop-makingcars-in-australia.html?ref=international&_r=0>
Required:
(a)

Based on the case above, explain the costs of foreign direct investment (FDI)
towards the host country, Australia.
(9 marks)

(b)

Based on your opinion, analyse and suggest ways for the Australian
government to attract and retain foreign investors.
(16marks)
[Total: 25 marks]

Structural Essay Questions


5. What are the three stages of the strategy-formulation process, and what is
involved at each stage?
6. What are the main differences between the three types of business-level
strategy?

7. Describe any three organizational structures that are common for a vast
majority of international companies.
8. Discuss the major points of differences between centralization and
decentralization, and explain the differences between an international area
structure and a global product structure.

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