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Toyota Plant in Valenciennes: Cross-Cultural Management

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Submitted By Flinth
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Toyota plant in Valenciennes

The Toyota Yaris is a subcompact car produced by Toyota since 1999. Yaris was first launched in the European market and it has achieved great success in the global market then. It was become Toyota's best-selling models in Europe. Besides, Toyota has used the "Yaris" and "Echo" names on the export version of several different Japanese-market models. At the beginning, Toyota decided to sell Yaris in the European market and build their overseas factory in Valenciennes France. As Toyata’s target market was in the European market, its overseas factory has the advantage in low labor cost and delivery cost. Valenciennes is a medium-sized city of 350,000 inhabitants located at northeast of France near the Belgium border. The region was severely struck by the steel crisis of the 1970s and the following constriction of the coal mining industry. The region suffered a huge economic depression with an unemployment rate approaching 30% during the 1980s. At that time, the installation of the Toyota factory in the industrial suburbs of Valencienne was a very important step of this regional revitalization process. Toyota ensured to the local government that it will create more than two thousand jobs for local residents. Considering of local economic situation, Toyota’s plant was more than welcome by local government and residents. To attract Toyota, national and local governments, as well as the European Union, gave Toyota a total of 51.5 million Euros in subsidies and tax incentives.

However, there were some concerns about the Toyota's willingness to remain in the region for the long-term. Many people worried that Toyota might simply exploit the offer and close the plant a few years later when the state subsidies expired. Other companies had already done it in the past, such as the South Korean firm Daewoo. For this reason, Toyota has to convince...

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