Toyota entered the Chinese market through a joint venture with FAW called Tianjin FAW Toyota Motor Co. As a late entrant, Toyota faced competition from Volkswagen and GM who held the top two positions. Toyota hired inexperienced local workers rather than experienced ones from FAW and established a training school to teach them skills. They used less automation so workers could learn from mistakes. By 2003, Toyota's Vios model became popular, helping the Tianjin facilities succeed. Toyota later established another joint venture called Guangzhou Toyota Motor Co. with Guangzhou Automobile Group. While Toyota held a small market share initially, it aimed to capture 10% of the Chinese market by 2010 through expanding dealerships nationwide

1. WINTERTemplate
TOYOTA IN CHINA
01
BONAM HAVILAH
&
FIROS FEBIN
PROJECT & OPERATION
MANAGEMENT
3RD SEMESTER
DBIBMS

2. 02
 Toyota Motor Corp. entered into Chinese automation 50:50
joint venture with First Automotive Work Corp.(FAW).
 Toyota was the late entrant to Chinese market where
Volkswagen & GM holding first two positions.
 Toyota hired young employees instead of experienced
from FAW. These employees lacked the basic
fundamentals, even they had never driven a car in their
life. They started training school on the job and also had
given Vios Subcompact demonstration on the floor to let
workers feel of the machines they were building.
 They have used less automation because they want their
employees to learn from their mistakes.
 By 2003, Vios had become popular in contrast to
Volkswagen & GMC with the success of Tianjin facilities. It
has earned plenty of goodwill from Beijing and has
established Tianjin FAW Toyota Motor Co.
SUMMARY

3. 03SAMMARY (Conti..)
 In 2004, Guangzhou Toyota Motor Co.,Ltd (GTMC) co-established
by Guangzhou Automobile Group Co.Ltd(Guangzhou Automobile)
of China and Toyota Motor Corporation (TMC) started construction
of a new plant in Guangzhou.
 Toyota, a relative latecomer to china, has a value 3.5 per cent of
the market, with 179,000 vehicles sold last year. General motors
captured 11 per cent of the market and Volkswagen holding second
largest foreign car maker in China.
 Toyota projected 10 per cent of the market by 2010 and planed to
increase dealers throughout the country.

4. 04QUESTION & ANSWER
 Discuss the major advantages and disadvantages of Tianjin as
a location for Toyota’s maiden venture in China.
Advantages:
 Availability of manpower (Labors).
 Large number of customers(Population).
 Industrial area.
 Transportation(Water ways ).
Disadvantages:
 Tiny plot of land.
 Unskilled labors.
 Late market entry.
 Low capacity (100000 car annually)
 High training cost.

5. 05QUESTION & ANSWER
 ‘The real reason of low automation of the Tianjin plant was that
Toyota was awaiting a response from the Chinese government
for a bigger facility’. Comment.
No. The Tianjin plant didn’t use much automation despite it being
Toyota’s newest plant in china, because they want their workers to
work with hands and to learn from their mistakes… if they had
introduced much automation their quality would have affected. They
prefer manual assembly as the labor in china is cheap.

6. 06QUESTION & ANSWER
 Could Toyota avoid delays in full-swing production at Tianjin
due to unskilled workforce there, had the company hired most
of the FAW veterans ?
No. Toyota can’t avoid delays in production because the labors are
unskilled and they are assembling manually.
Another reason is that they are quality oriented company.

7. 07QUESTION & ANSWER
 Toyota‘s new JV with Guangzhou Automobile is an indication
of its growing distance with the other JV partner FAW. What is
your take on this statement ?
Yes. Toyota is success in Tianjin plant and they want to grow the
entire country. So that they expand their signature in different parts of
country and strategically alliance with Chinese automobile
companies. They also seek technological growth with quality for their
leadership in Chinese market.

8. 08