Japan's automakers face Endaka Essay

GM could perform the same analysis as above but for the major Japanese players: Toyota, Honda, and Nissan. By calculating the increase in profits (or loss) and change in market share for these three companies (adjusted for market growth), GM can estimate the sensitivity of its profits to depreciation (or appreciation) of the Yen.

From the last two decades auto industry is growing more competitive. Competition from the foreign automakers like Toyota and Honda is also high. In

Japanese cars have the incentive of having an accelerated performance system that gives their cars more power under the hood and therefore increases the speed. They tend to have a longer life span and repairing them is just as equal with the American made cars.

Looking into the competitive threat more closely, the auto industry in the United States is rather sensitive to price, with a price elasticity of 2, or a 5% increase in price contributing to a subsequent 10% fall in demand. Thus, based upon the sticker price decreases potentially implemented by Japanese automakers, Japanese companies’ combined market share (roughly 4.1m units in 2000) stands to increase substantially, and could eat into General Motors’ overall market share. To highlight the sensitivity to the USD-JPY spot exchange rate, GM’s VP of Finance, Eric Feldstein, suggests that just a one-yen depreciation increases competitors’ operating profit by $400m. With $900m in net yen receivables, $500m in outstanding yen-denominated bonds, and more

create even more jobs for parts suppliers and service shops that cateur to japanese cars.

Japan’s unemployment rate of about 4% opposed to the U.S. unemployment rate of close to 10%. Even the financial debt to GDP ration is an advantage, and debt in the private sector has not increased unlike the U.S. and European countries, (Time, 2009). In addition, since Japan is a huge exporter and with the U.S. demand going downward, the international balances and growth declined especially as the dollar value dropped and the yen surged. •

Combining imported technology with their domestic innovation was translated in the inception of the Japanese low-cost mass productions system. Technological improvements such as the one mentioned above played a huge role in the country’s economic growth, as improvement of technology in one industry often influenced the growth of other industries. For instance, Japan’s steel industry was successful in improving the quality of steel used in manufacturing automobiles, due to the technological process in the casing of parts; the automobile industry too benefited and hence could reach a level where it could compete with its international

The 1970s brought major changes for Japan's external relations. The decade began with the end of the fixed exchange rate for yen and with a strong rise in the value of yen under a new system of floating rates. Japan also faced higher bills for imports of energy and raw materials. These new exchange rates and the rise in raw material costs meant that the excesses of the decade's beginning were lost, and large trade deficits followed in the wake of the oil price shocks of 1973 and 1979. Expanding the country's exports remained a priority in the face of raw material supply shocks, and during the decade exports continued to expand at a high annual average rate.

This is relevant in the case of Ford Motor Company, an American car manufacturer. In 2016, Ford was unable to compete in the Japanese market and was forced to exit due to

General Motors is one of the world's most dominant automakers from 1931. After 1980s economic recession the main goal for automobile companies was cost reduction. Customers became more price-sensitive. Also Japanese competitors came into market with the new effective system of production. So market was highly competitive and directed toward price reduction. The case states that in 1991 GM suffered $ 4.5 billion losses and most part of the costs of manufacturing was due to purchased components. GM NA hired Lopez in order to find the way from "extraordinary" situation and reduce costs.

Globalisation has had a profound impact on the Japanese economy influencing levels of international trade, business operations, financial flows, government policy, labour markets and even environment. This movement has been driven primarily by numerous TNCs, trade liberalization, and the deregulation of the financial system, and numerous strategies adopted by the Government and Economy, resulting in the creation of a 'new' Japan.

Over the years, the U. S. auto industry's market has been experiencing fluctuations due to many reasons including: price, quality and foreign competition. General Motors Corporation (GM) which had been the leading car and truck manufacturer had been experiencing declining market share and facing stiff competition from both U.S manufacturers and foreign imports such as the Asian auto producers that included Toyota, Honda and Nissan. The main reason for increased foreign competition was that foreign cars were more fuel efficient, smaller, less expensive, and often more reliable than their American counterparts.

The financial crisis starting in 2008 and the following recession hit hard the US auto sector. Traditional car makers had to realise that substantial changes were needed in order to maintain their strong position in the

In addition to the causes above, the following events have further deepened Japan’s economic situation during the Lost Decades:

The characteristics of the global motor vehicle industry are a boom in certain places and a bust in others all due to economic conditions in different nations. Four years after tow of Detroit Michigan’s big three went into bankruptcy American car makers are going “full throttle” with sales in August hitting an annual rate that if substantiated can take them back over 16 million and that is a rate that was last hit before the economic crisis and 80% higher than 2009 when GM and Chrysler went into bankruptcy. The opposite is happening in Europe being in its sixth year slump now and with a weak economy, high petroleum prices and an aging