Toyota Environmental Analysis

GENERAL ENVIRONMENT ANALYSIS

Political & legal- The main political factor that affects Toyota is trade regulations. The

automotive industry was stimulated by the government during the economic crisis. In 2008 the

U.S. government gave $17.4 billion short-term loans to General Motors and Chrysler, two of

Toyota’s competitors, to help them. Where in March 2009, Toyota asked the Japanese

Government for a $2 billion loan. The government got involved to try and keep the automotive

industry afloat. Also, the Quantitative Easing Policy was created by the U.S. Federal Reserve

Board; this policy controls inflation to protect U.S. trade. Some legal factors that affect Toyota

include pricing regulations, labor laws, taxation, mandatory employee benefits, and industrial

safety regulations. Toyota has many legal obstacles that it must overcome in order to develop its

products. Recently, Toyota recalled 6.39 million vehicles in the United States, Japan, and

Europe. This recall involved many models including the Corolla, RAV4, Matrix, Highlander,

and the Tacoma. This recall was for problems with the airbags, seat rails, and steering wheel

bracket. As laws change, Toyota must be careful to keep up with the rules and regulations that

affect their company and their employees (Healey, USA Today).

Economical- Some important economic factors that affect Toyota are the economic system of

the country, skill level of workforce, labor costs, inflation rate, and interest rates. The automotive

industry has been in recovery since the economic crisis. For example in the United States, the

passenger vehicle sales rose to 12.3 million in 2010, up from the 11.3 million in sales in 2009.

Toyota specifically had a rise in 2007, and again in 2010, bouncing back from the economic

crisis (Naughton,