BookTitleToyota Tsusho 70-Year History

Summary

Toyota Tsusho 70-Year History

Section 2 Events in the East Asia Region1 Business Development in ChinaFrom Three Local Subsidiaries to Toyota Tsusho(China) Co., Ltd.China had been riding a wave of economic growthsince the 1990s. To prepare for the full-scale motorizationof this huge country, Toyota Tsusho established threesubsidiaries in China: Toyota Tsusho (Shanghai) Co.,Ltd., in 1995; Toyota Tsusho (Tianjin) Co., Ltd., in 1997;and Toyota Tsusho (Guangzhou) Co., Ltd. also in 1997.As business in China continued to expand in the 2000s,Toyota Tsusho boosted its presence by establishingToyota Tsusho (China) Trading Co., Ltd., in 2005, andan investment company, Toyota Tsusho (China) Co.,Ltd. (TT CHINA) in 2010. Toyota Tsusho went on tobuild an operational structure to enable the integratedmanagement of its subsidiaries in China centered onTT CHINA that included contributions in kind fromthe three earlier subsidiaries. Seeing that the economicgrowth of China was not slowing down, Toyota Tsushodecided to use this structure to further expand business inthe automotive sector while growing new businesses innonautomotive fields.China’s Automobile Industry PolicyIn 1994, the Chinese government initiated anautomobile industry policy, making clear its intentionto grow the automobile industry?including themanufacture of parts?as a key industry in China. Thispolicy strongly encouraged parts manufacturers to moveinto China ahead of automakers. Seizing the opportunity,parts manufacturers in the Toyota Group moved rapidlyinto China. Toyota Tsusho took on the role of supportingthese companies by negotiating the establishment ofjoint ventures and carrying out other behind-the-scenesactivities. The now-robust parts industry environmentencouraged Toyota Motor Corporation (TMC) to enterinto a joint venture with the Tianjin FAW Group tomanufacture engines. This led to the establishment ofSichuan FAW Toyota Motor Co., Ltd., in which ToyotaTsusho invested 5% but that it later sold. Then, in 2004,TMC established GAC Toyota Motor Co., Ltd., whichlaunched full-scale local production in China. With GACToyota Motor in particular, Toyota Tsusho provided fullsupport for greenfield-type start-up operations, suchas by aiding in the setup of plants and coordinatingthe bringing over of parts manufacturers. In the 2010s,Japanese companies in China became caught up inpolitical tensions between the two countries, a majorcatalyst of which was the Senkaku dispute. Throughout,Toyota Tsusho continued to promote TMC’s Chinastrategy by supporting parts manufacturers’localproduction in China.Toyota Tsusho’s business activities in China focusedpredominantly on the automotive sector. But in lightof its TRY1 strategy of securing a balanced businessportfolio, Toyota Tsusho also cultivated business innonautomotive fields, including hygiene products, suchas superabsorbent polymers, and the food and lifestyleindustries.From Materials Supply to Vehicle TransportToyota Tsusho provides support in diverse areas toenable TMC and Toyota Group companies to achievejust-in-time production based on the Toyota ProductionSystem (TPS). The supply chain management (SCM)system built by Toyota Tsusho spans the globe andprovides total support for all of the Toyota Group’sautomobile production activities. The supply chainencompasses the procurement of steel materials andtheir processing and distribution by the steel materialprocessing center; and the procurement, secondaryprocessing, and inspection of specialty steel products;and the assembly of parts, including tire and wheelassembly. It also involves molten aluminum, Milk-runservices to enable the optimal collection and delivery ofparts, and transportation of vehicle. The transportationof vehicles had never been attempted by Toyota Tsushobefore.Ceremony for first CKD cars off the line at Sichuan FAW Toyota Motor Co., Ltd.Cornerstone laying ceremony for Sichuan FAW Toyota Motor Co., Ltd.152