For the organisation Toyota . you now need to present a range of alternative futures that could occur for this organisation in response to different environmental changes. For each of these futures, identify key benchmarks and milestones you would recommend adopting to ensure your organisation is maximising the opportunities that each of the futures potentially holds.
Your report should outline the following elements:
1. A minimum of 2 possible future states within which your organisation could find itself operating in the next 10 years.
2. For each of the 2 futures states, outline how the organisation will need to adapt if it is to be successful in that future state.
3. For each of these adaptations, outline what the benchmark measures and milestones ought to be to ensure the organisation is adapting appropriately as the environment changes.
Political and Environmental Factors Impacting Transport in Australia
This report sheds light on the future changes in the Political and the Environmental factors regarding transport and its impacts in Australia. The government of Australia have followed a policy of providing heavy subsidy on the fuel prices for several years. At present moment it is impossible to seek alternative and revert the policy. It is evident that transport in Australia is largely dependent on personal vehicles and this is why the government is currently in doldrums. However this scenario can be seen as a prospective opportunity for Toyota who have been developing concept projects already by using green parts which can reduce carbon output heavily. Other than that the company is also designing a new project for manufacturing cars which would run on alternative fuels. These future changes have presented a major business opportunity for Toyota and the ways in which the company can prospectively exploit these business opportunities have been reflected in this report.
Owning private cars are almost like birth right in Australia. The Fuel economy of the country is on the rise and parallely the CO2 emission is also on the rise. The agency for Environment Protection in Australia and the Highway and Traffic safety agencies in Australia have finalised the bar on the maximum fuel economy, beyond which the new car fleets cannot expand their emission limit. As per the information provided by Anitha (2017), the average Corporate Standard for Fuel Economy in Australia have demarcated that cars that give 100 kilometres of mileage should restrict CO2 emission to 250 cc per mile (Bowbrick, 2014). The government of Australia have confirmed that a re-licensing campaign would be carried out in the Australian territory for the new light and heavy vehicles. The Euro VI standards of emission control would be in practice since 2020 and the Ministerial Forum have released that cars or trucks that cannot adopt to the new regulation changes would have to undergo re-licensing.
Environmental Impact of transport in Australia is huge. The huge level of subsidisation in Australia is leading to effective reduction of fuel prices in Australia. As discussed earlier, the proportion of owning private cars in Australia is very high and as an impact the greenhouse gar emission has increased. The Energy regulatory authority of Australia and The Pricing Tribunal of Australian Territory has played a key role by regulating the electricity prices, because of which the consumer usage of electricity have been disciplined and the government have been able to save the major capital investments that went behind the electricity subsidy. This capital have been utilised by the government to keep the petro and diesel prices low comprehensively. Reports suggest that 70% of the country’s greenhouse emissions are being caused by the transport of vehicles (Bowbrick, 2014). The companies which are current manufacturing light weight personal cars are increasing the mileage of the cars and as an outcome, it is increasing the emission output. Australia being located in the proximity of the Arctic Circle, the high rate of emission is affecting the ozone layer and the UN have also expressed concern about the growing vehicular pollution in the country. AT present only 4% of the vehicles use alternative fuels in Australia (Hines, 2016). In this context, the Australian government is unable to remove the subsidy in fuel prices because transport and transit in Australia is largely dependent on the personal vehicles. The rugged terrains and natural interruptions prevent the establishment of wide networks of public transport in Australia. The government is however sponsoring the setting up of industries and factories to manufacturer’s cars that would run on alternative fuel in the future. A tax rebate of 12% would be offered to those companies who would produce such cars in the future on their corporate expenses and operational infrastructural costing.
Opportunities for Toyota in Australia
Keeping in mind the above discussed apprehensions of the Australian market, Toyota have focused on designing the hybrid vehicles with new specifications in the future. The hybrid models that are in the concepts lab of Toyota would emphasize on the fuel efficiency and global emission challenges without sacrificing power, affordability, and size of the car or durability. In fact the hybrid form the basis of the Compliance strategy of Toyota (toyota.com.au, 2018).
The Lexus Range of hybrid car range that came out in 2013 would be re-launched with new hybrid engine model bearing cars. The hybrid technology would replace the features like the accessory belts with new and improved electronic accessories (Pudaruth, 2014). The major aim is to enhance the fuel economy, durability as well as emissions. The company is aiming at introducing a new zero evaporative fuel-system which would ensure a stable reduction in the level of emission of the organic compounds that are volatile. However no commercial progress for launching the car in the market is achieved as of yet. As per Hatani (2017), the reason is that the company is not in a position to depict consumer preferences of 2025.
Some specific factors like Fuel price, technological progress and economic condition of the market in Australia would determine the sales forecast of the company in 2025 – 2030 fiscal years. These factors are outside the management scope of Toyota. This is why the organisation wants to reengineer the mode of the hybrid cars in such a way that it meets the requirements of the Global list of Declarable and Sustainable automotive. Besides, the Australian government wants the global automotive companies like Toyota, Suzuki or Hyundai to maintain the recyclability laws of the Australian territory (Lieberman, Balasubramanian & Garcia?Castro, 2018). Hence the manufacturing and engineering unit of Toyota have decided that instead of plastics that are extracted from petroleum, the company would be promoting the sales of cars whose internal and external components would be manufactured out of bio-based materials. In this context, the Green labs of Toyota have manufactured a bio-based plastic that is derived out of plant materials.
In case if the company can manufacture the eco-friendly car parts in large volume then there is a high possibility that they can get contracts from the Australian manufacturers for these green parts also. As per Shams Alpert & Brown (2015), this would compensate for the manufacturing cost and the company can launch the new model of the cars at competitive price in the Asian and Australian market. So long the company have introduced various car models in the market with bio-plastic parts. The most popular models among them are Corolla, RAV4, and Lexus and so on (toyota.com.au, 2018).
Current State of Car Manufacturing in Australia
In 2020, the company is planning to launch a new Lexus model that would have 56% of its parts manufactured with bio-plastic. The engineering of bio-plastic parts is going to be approximately like this (green parts are bio-plastic parts):
The Toyota Company is looking forward to design alternative fuels for the sustainability of the future. In the Australian market, with regulations of maximum permissible carbon emission limit for 100 mph cars at 250 cc per mile, the companies have to think big to make innovative changes in the engineering of their personal cars and large commercial vehicles. Large commercial vehicle agencies like Benz and Mercedes limited Australian stocks, however it is going to affect the sales of the personal car brands like Toyota, who generate a major percentage of their revenue from the Australian market. The agency of alternative energy Information attempted to keep the prices of petrol and diesel comparatively high because of the high demand of the personal cars (Austen-Smith et al. 2017). It is projected that within 2020. The ration of adult heads to cars ration in the country would be around 1:1.012. This is projected to create a large caste of carbon deposit in the atmosphere of the country. That is why Toyota have decided that in the Australian market they would project the cars that can generate better mileage than the petroleum based cars within 2022.
The Australian government feels that if potential company like Toyota launch the project, then other major competitors like Hyundai, Volkswagen, Audi and others who have the maximum market share in the Australian market would also be enticed to capture the market with cars driven by eco-friendly fuels. The company projects that Toyota cars can be run by ethanol, natural gas, electricity, biodiesel, within 2020. However, Miyakawa (2017), opines that these are not patent technologies as cars of these kinds are already available in the potential markets like Korea, Japan, and America and so on. Toyota is planning that particularly for the Australian market, they would design cars based on cellulosic ethanol, bio hydrocarbons and few other synthetic fuels. In order understand the market value of the cars driven by alternative fuel sin the Australian market the company is planning to conduct a demographic survey in Australia to understand the increment of purchasing power that would occur in the market (Suhanyiova, Flin & Irwin, 2016). Besides, the company is trying to understand if the customers of vehicles, other than personal cars have perception or wish to switch to vehicles run by alternate vehicles.
Toyota's Efforts to Design Alternative Fuelled Vehicles for the Australian Market
The company is planning to launch cars as well as trucks and water-vehicles run by alternative vehicles in Australia as the market rate of sale of all these vehicle types is high in Australia. The company have declared in their annual reports that by the use of bio-fuels run cars in Australia, the country can reduce the CHG emission rate by 50% within 2035 (Borah & Tellis, 2016). Hence Australia would be the first country to achieve this target in the world. However, there are some hindrances to the development to sustainable technologies that would favour the launch of these vehicles on the road. The first limitation is that the company have not yet been able to design fuel cell with alternative vehicles.
The development of fuel cells is very important in Australia. This is because of the topographic dissimilarities that would pervade the implantation of electric charging stations. In the absence of places for refilling or recharging their vehicles, the customers would not be enticed to buy such vehicles with ultra-modern technologies. Especially the owners of commercial vehicles would be in grave issues if this issue persists after buying such vehicles (Hines, 2016). Initially the prices of vehicles that run by alternative fuels is generally high. People buy them for long term cost effectiveness, as the cost of refilling with alternative fuels is lesser than traditional fuels.
The major milestone for Toyota in this regard is launching the New Linux model adapted to meet the guidelines of the new Australian regulations. This is going to be the first car model to meet the Euro VI regulation standards. The company wants to achieve the benchmark of 1 million unit sales within 2025 (toyota.com.au, 2018). In order to entice the customers the Toyota Company is offering a free insurance and 3 years free servicing to the first 1000 owners. Hence they suppose that by 2023, they should be able to achieve a market acquisition rate of 30%.
The major milestone for running electric powered cars is that within 2022, the company would be able to establish 5000 recharge stations across Australia and Tanzania. The company is also attempting to commercial launch the synthetic petrol car within 2030 in Australia. Hence the major benchmark would be to set up 5 indigenous manufacturing plants in Australia by 2020. Again they are aiming to start selling the cars by 2027 (toyota.com.au, 2018). At present the company is projecting these milestones to capture the market with these new initiatives.
This report analyse the futuristic states where Toyota Company have maximum chances of expansion in the Australian territory. The current future states in the political and environmental context have opened up a number of opportunities before the company. Analysing the first state of hybrid cars, it can be concluded that the major hindrance of launching this model of car is the lack of infrastructure in Australia and higher than competitive pricing. The company would have to utilise governmental rebate model to overcome these challenges. Secondly, the company is planning to launch the alternative fuel run cars. This would make the company and its products more sustainable. As an impact, the Australian government is also supporting this venture of Toyota Thirdly, the company is running a global project of i-cars. These are auto-intelligent vehicles that are yet in conception phase.
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