Toyota Psa Case Study - Aygo

DESCRIPTION OF TOYOTA

Toyota Motor Corporation is a Japanese multinational corporation. It is currently the world's largest automaker.

Mission

"Toyota Motor Corporation is a company devoted to enhancing the quality of life for people around the world by providing useful and appealing products" (Toyota Motor Corporation, 1994).

Its mission has not changed much in the past few years, for the current mission of Toyota can be characterized as becoming the world's leading vehicle manufacturer, which means that it expects to sell more cars than any competitors, whilst setting benchmarks on product quality and production efficiency. Toyota also aims at providing good quality cars at competitive and affordable prices in order to well establish its dominancy within the industry and to remain the number one of all automakers in the world.

On a long to medium term basis, Toyota even wants to become market leader in every continent.

Strategy

Toyota’s great success is related to its admirable image and reputation which allow the strategy of Toyota to be well implemented.

Toyota strives at decreasing costs while maintaining quality and increasing production and operational efficiencies. Toyota invests subsequently in several strategic areas few other car manufacturers can afford, such as hybrid engine and manufacture new cars that comply with the current �green trend’. Toyota also tries to expand its global presence in car manufacturing and enter new markets especially in Europe - through the mini-car market - which is mostly dominated by European brands. Toyota did a joint venture with PSA to penetrate this new segment; it already entered the luxury branch in 1989 when it launched a new brand: Lexus.

Toyota consequently wants to develop an attractive mini-car range with other car manufacturers to create synergies and benefit from experience curve effects. Toyota will grow step by step whilst building up a strong corporate reputation over time which facilitates good relationships between employees and with its suppliers, for it wants their relationships to be sustainable and healthy to keep moving forward and keep getting an edge over competitors.

DESCRIPTION OF PSA

PSA Peugeot CitroÐ"«n is a French vehicle manufacturer, number four in terms of production in the world.

Mission

PSA aims at consolidating its position as a leader in Europe, becoming one of the major manufacturers in South-America and developing its activities in China and Russia. In the globalised context, PSA also tries to become more profitable. It ambitions to sell 4 million vehicles in 2010, and to consolidate its leadership in the green-car sector.

Strategy

In order to reach its ambitions, PSA develops joint ventures and creates synergies with other car manufacturers (BMW, Toyota…), fosters R&D in diesel and hybrid engines, pays attention to vehicle design and clever advertising campaigns and improves service quality by notably reducing number of problems and time spent solving them. PSA also needs to seize opportunities in Eastern European market before others, invest in Mercosur countries and in China (R&D, plants, design centres), build highly competitive production facilities that can produce a great variety of models and finally offer competitive entry level vehicles and become an important player in this sector.

TPCA Mission & Strategy

Toyota Peugeot CitroÐ"«n Automobile Czech (TPCA) is an automobile manufacturing company in Kolin, Czech Republic. It is a joint venture between Toyota Motor Corporation and PSA Peugeot CitroÐ"«n. TPCA produces small cars for the European market such as Aygo by Toyota, 107 by Peugeot or C1 by CitroÐ"«n. TPCA started producing in February, 2005.

It strives for the three companies to share the mini-car market in Europe by benefiting from their respective experience and creating synergies to master the market. TPCA takes the best each company has to offer and it is eager for its plant in Kolin to become the undisputed number one plant in Europe in terms of productivity and car production.

EXTERNAL ANALYSIS

GENERAL ENVIRONMENT

PEST ANALYSIS

Political

In 1999, an agreement between the European Union and the European car makers was concluded in order to reduce the carbon dioxide emission to 140 grams per kilometers by 2008. Asian carmakers, such as Toyota, also accepted the agreement, with one more year to achieve it. This criterion can be met especially by developing hybrid engines or reducing the fuel consumption, which is a fantastic opportunity for the segment of mini-cars whose small engines consume less.

Economical

Economic uncertainty, high unemployment rate (8.9% in March 2005), and increasing fuel price characterized the European economic environment. Therefore a gain in volume of mini-cars sells is likely to occur, as these cars are cheaper. Moreover, emerging markets are booming and eager to possess Western cars.

Social

There is a growing concern about ecological issues among countries of the European Union, which may have an impact on the car customers. Moreover, because of poor economic conditions, customers increasingly pay attention to their purchasing power and to their consumption level. This is especially true for the car sector where fuel prices skyrocket.

Technology

The hybrid new technology becomes a crucial asset to satisfy both the ecological concern and the performance expectations in the car industry.

GLOBAL FACTORS

Fuel prices increase worldwide so that car industry may face a slowing down growth in every country. The competition is therefore likely to increase significantly as the demand is narrowing. Car makers strive to look for other prospects