Business Essentials for Professionals


Toyota’s Tight Ropewalk Between US And China

Toyota’s Tight Ropewalk Between US And China
Last month, two deals in China were announced by Japan’s Toyota Motor Corp and they were big in planning and strategy even though they were small in investment size, reported Reuters.  
The Chinese state-owned BAIC Group’s Foton unit would be provided with fuel-cell technology for buses and a green-tech research institute with Tsinghua University would be established, said the Japanese car maker. However, months of work to pledge fresh investment - in the United States was made by Toyota before starting to feel confident about the unveiling of its Chinese plans.
The announcement of the Chinese investments is being seen as a gesture of goodwill from the Japanese auto maker towards Beijing. The CEO of Toyota Akio Toyoda announced that it wants to “step on the accelerator in China” at an internal management group, reported Reuters citing information from minutes of meetings on March 19 and April 23.
According to the Reuters report, the company wanted to avoid antagonizing US president Donald Trump and therefore it announced its US investments first as a Strategy. 
“For Toyota to operate globally, we need to strike a fine balance between China and the United States,” the March 19 minutes quoted Toyoda as saying, reported Reuters. “It’s imperative to avoid making enemies.”
One unnamed senior executive described as a “significant move to steer its focus to China” the company’s efforts in as market where it is way behind the current industry leaders Volkswagen AG and General Motors Co, reported Reuters citing minutes from Toyota’s April 23 meeting.
There was no comment from Toyota on the report.
While a thawing the relationship between China and Japan earlier had provided the opportunity for Toyota to focus on China. But the company now finds it a challenge because of the US-China trade war as well as the proposed 25% import tariffs on foreign made cars and auto parts into the US on the pretext that such imports pose a threat to national security.
And in response to Trump’s proposed auto tariffs. Last week, Toyota made one of its strongest statements till date about the potential tariffs by calling it “a major set-back for American consumers, workers and the auto industry” and that it sent the message that Toyota’s “investments are not welcomed.”
Reuters reported the Toyota considered that it was a perquisite for it – before investing in China, that it placates the Trump administration. This was a reason that the company had announced a fresh investment of $749 million in U.S. manufacturing capacity and jobs, said the company chief at the meeting on March 19, says that minutes of the meeting according to Reuters.
The day following the announcement, Toyoda also spoke before the Economic Club of Washington, declaring: “I love America”. “I just don’t understand why we are called a national security threat and it pains my heart,” Toyoda said in answer to a question after his speech. “One thing I would promise, no matter what direction the discussion takes us is that Toyota will not leave America.”

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc