- April 9, 2020
TOYOTA AUSTRALIA STUDENT NO
1.What are the costs and benefits of FDI inflows for a host countrysuch as Germany?
FDI’Sallow the transfer of technology form the mother country to the hostcountry. The technology can be viewed particularly in the form of newvarieties of capital inputs from the country of origin to the hostcountry of the FDI. These inputs cannot be possibly achieved throughfinancial investments. The profits that are generated in the FDI’Sare charged corporate tax revenues by the host country (Silajdzic& Mehic, 2016).FDI’s also lead to human capital development since the employeesgain training of operating the machineries and such. The costincludes adverse effects on employment, balance of payment andcompetition.
2.Will foreign firms such as GM always make decisions in the bestinterest of the host country?
Foreignfirms such as the GM will only make decisions in the best interest ofthe shareholders of the company. Never will it make decisions at theinterest of the host country.3.In an effort to preserve German jobs, the Magna plan would close amore efficient plant in Spain. What would you do if you were aSpanish government official? What if you were a German official?
IfI were a Spanish official I would pressurize the FDI to offer thejobs not only Germans but also to Spanish people who were wellqualified for the jobs. If was a German government official then Iwould put the interest of my country first. Therefore I would help inpreserving the German jobs for fellow GermansSearchin the corporate financial information, annual reports, managementcomments etc. Pick one country, name that country and gatherresearch. Why did the company pick that country?
Toyotapicked Australia due to the fact that there was a lot of businesspotential in Australia. Also, the neighboring countries of Australiaoffered Toyota a potential market for the cars and spare parts(ToyotaMotor Corporation, 2016).Howmuch did the company invest to build a new manufacturing facility ina foreign country? When did they start construction? How long did ittake? How many jobs were created? What has been the result in termsof vehicles produced, financial results, trends etc. Toyotainvested approximately two million dollars in the new manufacturingin Australia that was because at first it was an assembly pointbefore growing onto a fully-fledged manufacturer of vehicles andspare parts. Toyota started constructing a plant in 1958 but startedoperating five years later. Then they only had 600 workers the figurehas now grown beyond lips and bounds. The company has adopted anupward trajectory in the sales and profits its formulation. The sharevalue has also appreciated with time. Apart from the obvious hick-upsin the Australian economy the company has been doing well financially(ToyotaAustralia sales climbs, 2016).
Didthey receive any government support or incentives to encourage themto build in that country?
Whenventuring into the Australian market Toyota did not receive anysupport or incentives form the government of the day then.Otherdetails? What is their estimated market share in the foreigncountry?
ToyotaAustralia is estimated to have a 35% percent market share of all thevehicles that are produced and consumed in the Australian market(AustraliaAutos Report 2015).Wouldyou rate this investment as a success?
Iwould rate this investment a success because of various factors. Oneof the factors is because the investment started making returnsalmost immediately after the cars started being assembled inAustralia. Secondly the branch in Australia opened up the region thatthe Toyota vehicles started being consumed by neighboring countries.The Australian market also led to the innovation of specializedmodels that are not only being consumed in Australia bit are alsobeing consumed all over the world.
AustraliaAutos Report (2015). Australia Autos Report, (2), 1-67.
Silajdzic,S., & Mehic, E. (2016). Absorptive Capabilities, FDI, andEconomic Growth in Transition Economies. Emerging Markets Finance& Trade, 52(4), 904-922.doi:10.1080/1540496X.2015.1056000
ToyotaMotor Corporation Australia Limited. (2016). Toyota MotorCorporation Australia Limited MarketLine Company Profile, 1-1
ToyotaAustralia sales climbs 8% in April 2016. (2016). Aroq -Just-Auto.com (Global News), 37.