Section 4. Overseas Business Expands Globally

Item 2. Australia

At the time of the merger of Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. in 1982, the integrated company consolidated its representative offices in Australia and established a system for coordinating local subsidiaries engaged in operations ranging production and sales to financial services. With regard to production, Toyota achieved 85 percent local production rates with the Corona and Corolla in accordance with the automobile policy of the Australian government, but operations were not profitable. Improvement efforts were made by introducing the Toyota Production System and QC (quality control) Circle activities. As a result of these initiatives, the total man-hours per vehicle at Australian Motor Industries (now Toyota Motor Corporation Australia Ltd.) was slashed from 45.2 hours in 1980 to 27.9 hours in 1985.

The international competitiveness of the Australian automobile industry, however, was low because of government protection measures, and in 1984 the government announced a policy of reorganizing the five Japanese and American manufacturers producing in Australia under three groups with the objective of streamlining the automobile industry. In response to this policy, TMC established United Australian Automotive Industries (UAAI) as a joint venture with GM of the United States in May 1988. The objective was to expand the production volume of each model by supplying the production vehicles of each company under each other's brands.

Subsequently, the Australian government gradually eliminated the measures protecting domestic manufacturers such as UAAI, and the joint venture's business environment changed. As a result, TMC and GM dissolved their Australian joint venture in March 1996.

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