Question 2 Toyota has established production facilities in Europe to service European markets. Has Hyundai, Kia, or Honda followed the same strategy? If so, in which countries have they set up manufacturing, and are they the same ones where Toyota is manufacturing
One of Toyota’s international strategies has been the spread of its production presence in different parts of the world in order to effectively serve its global niche. Europe is one of the places where the company has performed remarkably well and set up its production facilities. Toyota’s rivals such as Hyundai, Kia, and Honda have also pursued the same strategy and established production facilities in the different parts of Europe (Law, 2017). The rivals also have an active commercial presence in many of the countries that have Toyota products. The idea has been to demonstrate their willingness to connect closely with the markets in such countries and create employment. Employment creation by a foreign investor is usually appreciated by such countries because it is considered as a reciprocation gesture on the part of the manufacturer. The static impact of trade agreements may act as an enhancer or a setback in the business because it determines the nature of synergies that a company can benefit from when operating in such a country.
Hyundai has established its presence in Germany, Czech Republic, and Russia from which it gains a vantage access to the European market. Honda maintains a robust presence in the United Kingdom and other European countries, which serve as its entry point on the European market (Law, 2017). Kia has 30 markets spread across Europe and headquarters in Frankfurt, Germany (Law, 2017). The company also has a production base in Zilina, Slovakia from where it manages its design-led transformation. The various companies embrace different strategies that are intended to endear them to their respective clients. The motive of gaining access to the markets in different European countries is based on the need to optimize the advantages of the multi-cultural atmosphere and unique merits of an expanded market base.
One of the dynamic impacts of trade agreements is that it fosters the culture of fair competition and allows manufacturers to capitalize on their unique potentials to maximize their performance on an expanded market. There are usually concerns over trade imbalances in the event when a country feels that the foreign companies undermine the stability of their local markets. In general, the agreements are intended to enhance mutual benefits between the countries in order to guarantee sustainability of the trade.