• Toyota can built a good relationship with other countries
When Toyota built a factory manufacturing, it automatically built an economic agreement with the country. Therefore Toyota expecting a more eficient and easy way of dealing when it comes to several expand and strategic ways to improve the company.
• Toyota plan to get well known in worldwide
By expanding large in overseas, Toyota considered to be recognize in nationwide. It can show the world about the great capability of the Toyota company by showing how the company manage to control large number of factory that spread overseas.
• Toyota has major advantages in its strong cash position
Toyota expects to use its strong financial position to expand operations worldwide and increase its commitment to R&D, especially in safety, automation, and environmentally friendly vehicles, such as the Prius, one of its hybrid cars.
• Toyota and other companies operating in the U.S. market have struggled with high gasoline prices and high competition, which have cut into profit margins. Toyota has also suffered with high raw materials costs, both inside Japan and in its other operations worldwide. Given Japan's rapidly aging population and the sluggish economy, Toyota and other Japanese car manufacturers will have to do well in the United States to survive.
• The North American Free Trade Agreement
Toyota services U.S. markets through significant exports from Japan as well as assembly inside North America. Canada, the United States, and Mexico are members of the North American Free Trade Agreement, so parts and final vehicles can be moved from one country to the other duty-free, as long as the North American content is at least 62.5% of total cost.
2. The risks it faces in expanding its overseas manufacturing:
a. Toyota and other companies operating in the U.S. market have struggled with high gasoline prices and high competition, which have cut into profit margins.
b. Toyota is faced by a corporate social responsibility about the labor in japan itself. How does it going to happen about people in Japan when there are no fieldwork for them.