Section 2. European Operations Become Autonomous
Item 4. Coordinating Structures and Localization
TME founded as a holding company
As the number of production bases throughout Europe increased, Toyota Motor Europe NV/SA (TME) was established in 2002 as a holding company of TMME and TMEM. TME was also given the functions relating to management planning, public relations, legal affairs, and environmental responses. TMME became a marketing organization, TMEM an R&D and manufacturing company, and TME a management company. As such, the roles and responsibilities of each were clarified.
In 2002, as the second block exemption regulation governing the distribution of motor vehicles under EU Union law was about to expire, a new regulation was adopted. Block exemption regulations specified special measures that partially modified the principle of free trade within the EU under EU competition law. The new regulation had a one-year transition period and took effect in October 2003. The new regulation made the following changes: 1) dealer territories were eliminated and dealers were free to sell anywhere within the EU; 2) if the standards specified by a distributor are met, the distributor is obligated to certify not just dealers, but also independent repair business operators as certified servicers; 3) handling of multiple, competing brands by the same dealer is permitted; and 4) further restrictions were imposed on the obligation to use authorized parts.
Toyota saw the shift to these strict regulations as an opportunity to strengthen its sales network and implemented reorganization toward a large-scale sales network by expanding the scope of dealers and making effective investments. The result was a decrease in the number of dealers in Europe by about 10 percent, but sales volume per dealer rose substantially, and the sales network was considerably stronger.
TMME, TMEM, and TME were integrated in 2005 to enhance their intercommunication and a new TME was created. The independence of TMME and TMEM was maintained and they became internal companies, while TMEM was renamed R&D Manufacturing Company.
The new TME took measures for the further localization of marketing and manufacturing operations that TMME and TMEM had promoted, and worked toward achieving the Europe 2010 Vision set in 2004 (which targeted sales of 1.2 million vehicles by 2010). Sales reached 1.24 million vehicles in 2007, achieving the target ahead of schedule. The new TME continued to take measures to further solidify its business foundations and autonomy.