Question 1 Why did the Europeans try to protect their auto industry from Japanese imports, and do you think this was fair to European consumers? – you should discuss the pros and cons of global, bilateral, and regional integration using European market and Japanese autos as an example.
Toyota’s European Drive
Part I
Europeans tried to protect their market from Japanese imports because of a range of factors including advantage of affordability of the Japanese imports and the elements of versatility and dynamism that were associated with the Japanese products. Toyota had emerged as a formidable competitor that was flooding the European markets with cheaper imports compared to the highly priced European cars such as Mercedes Benz and BMW. As such, the aspect of affordability was the determining factor (Toyota European Drive, 2017). In Japan, Toyota enjoyed lower costs of production because of the unique advantages of the country’s economy and favorable government policies. The country enjoys a large and growing pool of skilled motor vehicle engineers who provide low-cost labor to the industry. In this regard, Toyota is able to sell its products at significantly lower prices compared to those from European countries. It was in recognition of such a fact that the Europeans sought to limit the presence of Toyota imports on their market.
Secondly, Toyota’s design-led production played to the advantage of the company on the European market. Unlike, their European competitors, Toyota had the capacity to manufacture a wide range of cars that vary in terms of models and aesthetics (Toyota, 2017). Such element of diversity posed a threat on the European products because the European market consumers were warming up to such advantages of diversity. In many ways, the various types of the Toyota products seemed to align with the unique needs of the European buyers who were willing to savor the uniqueness of the Toyota products. The other challenge lay in the fact that the highly-priced European car imports were not popular in the Japanese market. The Japanese market is generally more receptive to homegrown products compared to imports. As such, the European countries felt that there would be a gross imbalance in global and bilateral trade if they allowed Toyota unlimited access to their market yet it did not have production plants in the country to create employment and pay taxes.
In my view, I think that the European countries were not being fair to their consumers who deserved the freedom of choice in accordance with their preferences. In the spirit of globalization and liberalization of the market economy, the European countries should have opened up to the car imports from Japan and found alternative ways of shielding their local manufacturers from the adverse effects of the cheap imports from Japan. The customers should be left to choose products in accordance with their tastes. In conventional economics, market forces should be left to control the market. In this regard, it might be argued that the primary factor should have been the promotion of the local products in a manner that would not have compromised the choices of the customers with regard to the Japanese products. Therefore, I hold the view that limiting the imports from Japan on the European market was inappropriate and very unfair to the consumers.