History of Toyota Company’s Investment in Brazil

Toyota has several offices and manufacturing facilities as well in Brazil. In order to set up a company in any country that has multinational functions, the analysis and viability for the said launch must be studied carefully. For this purpose a feasibility report is prepared setting out the scope, evaluation and assessment, findings and recommendations.

The scope describes the boundaries within which the research to evaluate a particular investment in a country is set. It defines the guidelines for carrying out the research and states the matters that should be evaluated. The scope must first be prepared by any junior researcher which must later be presented to personnel at more senior level in order to approve and make it final. The scope once approved shall also be printed and documented as is one of the most important documents. For evaluation and assessment the team carrying out the research must have a combination of persons with different skills. The team must have both senior and junior personnel with sufficient mix of skills and experience. Where there is particular expertise required then an external expert might be called for and for this purpose a separate detailed research on that part shall be performed. After complete evaluation and assessment, which must be evidenced by tests performed, an initial draft report shall be sent to the senior personnel. This is required because sometimes it happens that the personnel on field might miss out certain important steps which are crucial and important for the purpose of verification. Senior personnel will also check whether the on field persons are going and heading towards in the right direction. If it is considered appropriate, certain modification to the work performed is carried out. This also includes adding some extra work to be made part of the scope. After this correspondence, the field level personnel take some more days which may extend to a week or two, after which a report detailing findings are sent. On the basis of finding, recommendations are prepared on which the final decision as to whether investment shall be made or not shall be finalized.

In case of Toyota Brasil, the above stated process for the decision of investment was followed. The investment made was actually a mix of an expansion of both personal resources and loans and advances taken. The loans were obtained by issuing debentures and a certain time period was agreed upon for the purpose of its repayment. This form of loan also carried interest to be paid either on annual basis or on semiannual basis. Brazil Car is one of the finest makes of Toyota Company. This is ranked quite closer to Carros Brasil and accounts for a major portion of their consolidated worldwide revenue. The system for recording revenue on a world wide scale must be said to be quite sophisticated. So far it can be easily said that the investment decision made by the company for opening up manufacturing facilities in Brazil has been giving good amount in return. There is more scope for work in the country and it is believed that the decision makers are once again analyzing situation for a possible new investment.