CASE

case

Case

Introduction

Toyota is the second largest car manufacturer and seller in the world today. In Europe ithas long been a marginal player as compared to its other endeavors in markets within US,Asia and Latin America. Over the last few years Toyota's market share has increased inEurope even though the European market has several strong regional competitors.

Toyota's vision is to capture 5% of the Old World's roadway by 2005.However, the problem persists of how to establish Toyota as a brand in the Europeanmarket. According to (www.economist.com, 2006), Toyota has been a major success inNorth America controlling over 10% of the market share but it cannot apply the samemarketing strategy in the European market. Europe has several countries, within whichthe population exhibits its own unique preferences for certain automobile brands.With rising fuel prices, growing concern for the environment and an excellenttransportation system throughout Europe, Toyota has a challenge in establishing itself.

Toyota must try and establish itself as a brand within Europe, specifically, a brand thatcaters to both the needs of the European market and consumer but, also makes Europe apart of the new motoring world. To successfully do this Toyota Motor Europe (TME)needs to do an extensive review of the current and future market, keeping stride with thevarious market segments in the region.

Another important factor that TME would have to pay specific attention to is the socioeconomic factors prevalent in Europe currently. A combination of extensive marketresearch and the flawless creation of a new Toyota brand would take it beyond itsambition of achieving 5% growth in market share.

Situation Analysis

Toyota had first started exporting to Europe in the early 1960's beginning with countrieslike Malta, Cyprus and Denmark. The European market was protected and importrestrictions were imposed as early as 1975. The situation had no t changed much over theyears. In 1993 the EU limited imports of Japanese vehicles and also imposed a 10% dutyon all imported vehicles. These restrictions on imports would be removed in 1999 whichwould pave the way for unrealized potential within the European market for Toyota. Inorder to capitalize upon this opportunity, Toyota must establish and analyze its currentbusiness position. (See Figure 1.1 for SWOT analysis.) Toyota Europe SWOT AnalysisStrengths Weaknesses- Toyota's "Just in Time" manufacturing system supported by"Jidoka"- Toyota's promise towards "Sustainable Development" andgreen technology- Toyota's growing market share across the globe· More than 60 years of experience in the Automobile Industry· Toyota's management team which has laid out a very strongvision· Popularity of Japanese SUV's in Europe accounting for 9% ofthe European SUV market· Technical & market Research centre in Brussels· A varied product range· Toyota's failure to customize its product line for the Europeanmarket· Lack of Production capacity in Europe· Lack of a strong Dealership network in Europe· Below average sales of Toyota dealers as compared with othermanufacturers· Absence of a sound brand image of Toyota in Europe· Low sales of Lexus cars in Europe· The present marketOpportunities Threats· Appointment of a Mr. Fujio Cho as TMC'c president· Setting up a new factory in France· Lifting of the restrictions ...