As the globalization is increasing in a rapid manner, there are numerous organizations who are aiming to run their business in the global market. The fundamental aim of the companies is to get international recognition and this increasing rate of profitability by getting a strong base of customer. However, as the nature of international business is highly volatile, the standard of rules and regulations are also changing in a rapid manner. The legal system of individual countries are also changing promptly which can have a firm impact on both the domestic and foreign companies. This paper puts forth the discussion of the legal aspect of international business in the context of Toyota Motor Corporation. This paper will highlight the legislative framework of Australia, which is affecting the functionality of the company. The role of treaties or agreement on the products of Toyota Motor Corporation will also be discussed in the report.
Toyota Motor Corporation is one of the famous multinational automobile companies, producing automotive products. The head quarter of the company is Japan, which is running their business successfully throughout the world. Toyota Australia is one of the most significant subsidiaries of Toyota Motor Corporation which markets Toyota products in Australia. In addition to that, Toyota Australia also holds the responsibility of marketing the Lexus vehicles in the country. Headquarter of the company in Australia is in Port Melbourne from which, the entire functionality is being operated. There are multiple products, produced by the company which ranges from four-wheel drive, hybrid cars, sedans, Utes and vans along with sports vehicles.
The number of staffs, working in Toyota Australia is 4,129 who are highly committed towards producing high quality of products. The total number of staffs working in Toyota all over the world is 69,148 (Toyota-global.com. 2018). Producing resource reliable vehicles is the fundamental focal point of the company. Their underlying aim is to promote sustainable development in the society by serving high quality of products. The global vision of Toyota Motor Corporation is to be the leader in automobile industry.
Legislative regulatory framework is considered as one a certain set of rules and regulations that can have a strong impact on the internal functionality of global firms. The inclusion of strong legislative regulatory framework creates certain obligations for the companies to run their business in a systematic manner. According to Ross (2017) being the bestselling automotive brand in Australia, Toyota has secured majority of market share in the entire industry. However, there are certain rules and regulations in Australia, which are acting as a driving force behind the company to run their business in a comprehensive manner. The most significant challenge, being faced by Australian automobile industry is in terms of designing the products. The Australian Design Rules (ADRs) is one of the major national standards, executed in recent times for the sake of ensuring safe and emission free vehicles. According to Motor Vehicle Standards Act 1989, it has become the matter of utmost importance for the automotive companies like Toyota to comply with that of the Australian design rules before supplying the car in the Australian market. This act also highlights that, it is significant for Toyota to run registered automotive workshop in order to promote their products in the market (Infrastructure, Regional Development and Cities 2018).
The inclusion of rules and regulations related to tax is a significant factor which can impact the company to run their business in a cost effective manner. The legal system of the country has fixed certain amount of GST on the luxury cars. It is important for the companies like Toyota to give the GST of one eleventh percent on the total amount of every cars. Income tax is also being provided by Toyota. During 2017-2018, the rate of income tax for Australian automobile industry is $57,581 (Ato.gov.au. 2018). Certain vehicle safety rules have also been implemented in Australia. This is the way, through which the safety of the cars is being ensure. This is the key factor for protecting the health and well-being of the customers. According to Road Traffic (Vehicles) Act 2012, it is imperative to get license from the government before introducing any motor vehicles in the public road. Therefore, it has become highly significant for the companies like Toyota to get registered license for every car before running them in the road. Road Traffic (Vehicles) Regulations 2014 has also been executed in order to impose specific requirement on vehicles. Part 5 of this act deals with the drive safe publications on the motor vehicles (Transport.wa.gov.au. 2018).
As discussed by Maurer et al. (2016) Noise Level Assessment is one of the most significant practices, being followed in Australia. This regulatory framework highlights that it is imperative to test the noise level of a car before operating them in the public road. This is leading the companies like Toyota to appoint an approved officer in order to carry out an intense noise level assessment. Australian Light Vehicle Standards Rules (ALVSRs) is one of the most effective regulatory framework, executed in Australia. The fundamental aim of this regulation is to promote healthy coordination between the road agencies, the representative from the automotive industry, along with the road safety experts and police in order to monitor the durability of the cars in the road. Manufacturing heavy vehicles is also a significant aspects Of Toyota Australia. Therefore, they also need to follow Austroads framework (Singer 2018). This framework imposes certain regulation for running the heavy vehicles in the regional and remote areas of Australia. This is basically a framework which needs to be followed by the heavy vehicle like Toyota to operate their products properly in the road.
Fuel tax credits is also being followed by the Australian automobile industry. As per the view of Conlon and Perkins (2018) the amount of fuel tax credit is entirely dependent on the rate of usage of fuel by a company. However, this framework is not applicable for the light weigh vehicles whose gross mass is below 4.5 ton. Oil program is also a major undertaking of Australia. It is the prime responsibility of the companies like Australia to manufacture the vehicle in such a manner which am support in running the, through recycles oil. It is true that Toyota is highly committed towards maintaining their corporate social responsibility. Still, this framework is serving them with the ability to manage the used oil in an environmentally sustainable manner. In this framework, it is imperative to give the excise and customs duty on using the petroleum based oil (Ato.gov.au. 2018). Another major transport rule in Australia is Cleaner fuels grants scheme. The underlying mission of this scheme is to provide the vehicle manufacturers with the fuel grants which is the key of running business in an environmentally sustainable manner. With the assistance of this scheme, the automotive companies like Toyota has acquired cleaner fuels, renewable diesel along with biodiesel and thereby run thereby practice their corporate social responsibility (Conlon and Perkins 2018).
Treaties can be considered as an agreement which intends to make massive change in the interval functionality of a company and thereby getting result outcome fro, business. The automobile treaty with Maruti Suzuki in order to improvise their product line and thereby strengthen their position in the market. Toyota has also partnered with Baleno and Brezza as well as Suzuki in terms of offering Corolla sedan to that of the maruti. The aim of both the companies is to lead the global automatic industry by 2020. This business treaty has been signed during February 2017. This business partnership aims to introduce electric vehicle in the Indian market by 2020. Through the intense competition in between the companies, the core aim of both Suzuki and Toyota to amplify the automotive market of the country by providing the customers with high quality of products (Businesstoday.in. 2018).
In addition to that, during August 2016, Toyota Motor Corporation and their major subsidiary Daihatsu Motor Co., Ltd have made an agreement for the sake of strengthening the Small Car Operations. This agreement intends to produce high quality of cars especially for the section of small car with the assistance of unified strategy. This agreement will serve both Toyota Motor Corporation and Daihatsu Motor Co., Ltd with the ability to get sustainable development. This agreement has enabled Toyota Motor Corporation to make lucrative design of the small cars that can catch the attention of customers easily. At the same time, this treaty also aims to share the exchange and thus amplify the value of both the brands. It is true that both Toyota Motor Corporation and Daihatsu are engaged with a friendly competition. The management approach of the companies are also different from each other (Beer 2018). Still, the shared strategy can have a firm impact on promoting the next generation technology which is the key of attaining sustainable growth of business. As per the Akio Toyoda, the president of Toyota, the shared strategy will act as a greatest opportunity for both of them, by which they can have the advantage of the strength from each other. This is the way, through which they can put stress on their core competencies which is very much needed in order to sustain global competitiveness.
Under this joint strategy, both Toyota and Daihatsu are showing intense commitment to combine their operational base and thereby enjoy their areas of technical expertise and proficiency to get operational excellence. Small cars, technology and Operations are the core areas of collaboration between Daihatsu Motor Co., Ltd and Toyota Motor Corporation. With the assistance of this shared strategy, both the companies can optimize their product line in accordance with the requirements of customers. This is the mode of accelerating the product line by introducing high quality of small cars (Autocar.co.uk. 2018). Another significant aspect of this collaboration is that, this will help both the companies to implement deployment strategies in order to adapt new technology to make environmental friendly cars. As the result of this collaboration, Toyota has executed fuel-efficient technologies which is the key of improving the cost-effectiveness of the cars.
At the same time, during August 2017, Toyota Motor Corporation and Mazda Motor Corporation has made an agreement to enter into the capital alliance and thereby reinforce their long-term partnership. The companies have signed the treaty in terms of establishing vehicles in the United State, adapting technology in order to produce electric vehicles and develop the connected car technology in a collaborative manner (Mathur et al. 2018). Another vital aim of this treaty is to execute innovative safety technology and thereby expand their complementary product line. Both the companies have entered into a capital alliance agreement which can result in equality and independence of both of them. According to the capital alliance, Toyota Motor Corporation will hold the responsibility of subscribing and thereby acquire share through a third party. In the same way, Mazda Motor Corporation will also subscribe and thereby acquire the third-party allotment. This is the key of strengthening the value of share of both the companies (Newsroom.toyota.co.jp. 2018).
Conclusion:
Based on the discussion, it can be concluded by saying that Toyota Motor Corporation is being highly impacted by the Australian legal system along with multiple treaties and conventions. As the giant in the global automobile industry, the company is highly committed towards producing environmental-friendly cars, which can protect the health and well-being of the customers. Enormous motor vehicle standard are serving Toyota with the ability to produce emission free cars which is the fundamental factor of catching the attention of customers. Different vehicle safety rules have also been introduced in Australia which intend to ensure the safety of the cars. In addition to that, roadmap has also been introduced in Australia for running the heavy vehicles in the rural and regional zones of the nation.
Reference List:
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Ato.gov.au. (2018). Product stewardship for oil program. [online] Available at: https://www.ato.gov.au/business/fuel-schemes/product-stewardship-for-oil-program/ [Accessed 31 Aug. 2018].
Autocar.co.uk. (2018). Toyota to take full control of Daihatsu | Autocar. [online] Available at: https://www.autocar.co.uk/car-news/industry/toyota-take-full-control-daihatsu [Accessed 31 Aug. 2018].
Beer, A., 2018. The closure of the Australian car manufacturing industry: redundancy, policy and community impacts. Australian Geographer, 2(1), pp.1-20.
Businesstoday.in. (2018). Toyota and Maruti Suzuki to share models from next year. [online] Available at: https://www.businesstoday.in/sectors/auto/toyota-maruti-suzuki-india-share-models-next-year-baleno-corolla/story/273622.html [Accessed 31 Aug. 2018].
Conlon, R. and Perkins, J., 2018. Wheels and deals: The automotive industry in twentieth-century Australia. Routledge.
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Maurer, M., Gerdes, J.C., Lenz, B. and Winner, H., 2016. Autonomous driving. Springer Berlin Heidelberg, Berlin, Germany.
Newsroom.toyota.co.jp. (2018). Toyota and Mazda Enter Business and Capital Alliance | TOYOTA Global Newsroom. [online] Available at: https://newsroom.toyota.co.jp/en/detail/18012215 [Accessed 31 Aug. 2018].
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