Australia Case Study

Introduction and Summary of case study

Toyota Australia, the leader in Australia automotive industry, immediately expressed its fear that facing unpredictable pressure and they would continue with their transformation plan after General Motors Holden announced to exit car manufacturing in Australia. It is true that Toyota is considering whether leave Australia automotive market but it is not decided. However, David Smith, secretary from the Australian Manufacturing Workers Union, said it was almost be true that Toyota would leave Australia. Toyota Australia, the best-selling and most trusted brand in Australia, has a splendid history of more than 50 years in Australia. In 1986, Toyota started exporting and in 1991 Toyota emerged as the industry

To what extent does the macro-environment affect Toyota Australia?

The adverse macro-environment including the fiercer competition in local market due to Australia’s low-tariff barriers, the demanded vehicles of emerging markets in developing countries was counter to the types of Toyota manufactured, the small scale of operations limited by Australian market and population, the unbalanced free trade agreements and the adverse currency development. This would have significant effect on Toyota Australia’s decision of whether leave Australia or not.

2. What can Toyota Australia do as an industry leader when the whole industry is facing challenge?

The whole automobile industry is facing a problem that the market is declining, especially to the main automobile manufacturers. As it was shown in exhibit 3, the market share of main automobile manufacturers, such as Toyota, Holden, Ford and Mitsubishi were all decreasing in last 14 years. Meanwhile, the market share of other brand increased from 19% to 32%. The threat of other brand, new entrants and other reasons are forcing Toyota to an unimaginable situation.

3. To what extent could Toyota Australia reduce the cost and avoid the ethical problem at the same

For the macro-environment level, the political, legal and environmental aspects are not involved in this case. For the economic aspect, the leaving of Toyota would reduce the tax income of Australia government and also reduce the government support expense, so there would not be much influence in economic aspect. For the socio-cultural aspect, there are 4200 direct employees in Toyota. If Toyota exit Australia, considering the indirect employees and other jobs related to Toyota cars, it would bring severe unemployment. According to Andrew, Yannis and Peter (2001), both current unemployment and past unemployment would decrease the life satisfaction and bring other psychological impact. Hence Toyota’s leaving would seriously impact the psychological impact. For the technological aspect, although Toyota has some sophisticated techniques, there is still many other manufacturers which all have some sophisticated techniques, there would be no distinct effect in this aspect. In addition, there are also adverse situation that impact Toyota’s profit. The first is the small scale of operations. As a large country with small population, Australia’s automobile’s sales accounted for only 1% of the global market. This limited