Sustainability Issues In Automotive Industry Of Australia: A Case Study Of Toyota Motors

Overview of Toyota Motors

Sustainable marketing is a feature of the larger field of sustainable community development. Sustainable marketing is a new perception in promoting and trade but by this time it becomes the most desired approach for the multinational companies. Sustainable marketing is grounded on the notions of conservational and communal sustainability and seeks to meet the desires of this generation without messing with the future. It is basically the bigger theme in the trade, which is based on everything from wind power to eradicating the Trans fats.   

This report will outline the sustainability issues in an automotive industry of Australia. The chosen company here is Toyota Motors. The study will identify the environmental factors that are creating the need for sustainable marketing within Toyota Motors. It will also outline the probable impression of the sustainability matters of the establishment in the future. The report will also evaluate the extent to which Toyota motors is currently managing the sustainability within the business.

Toyota Motor Establishment is the parent corporation of Toyota Group. The company is the major automobile builder in the planet. There are nearly 600 subsidiary businesses which are involved in the manufacturing of vehicles, automobiles parts, and marketable and industrial vehicles. The business began in 1933 as a partition of Toyoda Automatic Loom Works Ltd. It was during the 1950s that Toyota’s automobile manufacturing workshops were back in operations and to gain the competitiveness, the stated firm initiated the careful study of technical and economic superiority. The business’s automotive section comprises the strategy, production, assembly and sale of the traveller vehicle, and commercial vehicles such as trucks and also sells related shares and fixtures ("Challenge, Commitment, Progress", 2011). Toyota’s automobiles are traded in more than 170 nations and regions. The stated firm employs over 300,000 employees across the globe and leads the automotive business in the environmental technologies with the achievement of the hybrid skill on the Prius and Camry Hybrid.

The supply chain integrated by Toyota Motors was one of the leaders in Low-cost supply chains. The entire supply chain of the company was developed with an aim to decrease the prices and get the price to nominal possible values (Chen, 2015). The supply chain advanced by Toyota is very highly assimilated and had a comprehensive incorporation of the right from the raw material suppliers to its vendors in composition with the industrialized units, warehouses, wholesalers and to the end consumers.

Supply Chain Integration by Toyota Motors

Political: The political stability in the major markets of the countries in which the automotive giant is operating is an opportunity for the company. Free trade contracts between Japan and other nation’s present occasions for better market penetration. The business friendly environment in the developed countries provides a great opportunity for the Toyota ("CSR Policy/Organization and Structure", 2015). The worldwide automobile business is a subject for a variety of political influences such as political constancy, foremost geopolitical tendencies and others. The stated firm has also knowledgeable direct influence of the political issues in many occurrences.

Economic: There are many economic factors that affect the automotive industry. Some of these factors are the amount of inflation, currency exchange rate, and macro-economic climate in the nation and in the business (Dutta, 2011). Cost of labour and tax rates also have direct and indirect implications on the revenues of Toyota. As for illustration, the high inflation rate in India, affect the sales of Toyota by 58 per cent in the financial year 2014.   

Social: In the current business environment, there has been an increment in the customer consciousness and matter about the environmental inferences for driving a vehicle and it is the most significant social propensity in the current business context to be addressed by automobile builders. Toyota is also attempting its best to address these issues by growing its emphasis towards the sustainable manufacturing by producing more electric and hybrid cars (Fliedner, 2012). The sustainable marketing of the stated firm also gets impacted by other social factors such as family values, variations in the consumer attitudes and opinions in the direction of the automobile and travelling.

Technological: There has been tremendous improvement in the technology over the last few years. The enhancement in technology has always been a great opportunity for the automobile companies. The rising trend of the E-commerce is a great opportunity and always help in promoting the trade of the company (Frick & Laugen, 2012). Enhancement in technology always delivers great opportunities for automotive industry to upsurge its business and to operate its business in a very smart and productive way.

Environmental Factors: the decline in the reserves of oil is an opportunity for Toyota to develop its market of modern technology cars. The company could utilise this opportunity in promoting its battery or electric cars (Frick & Laugen, 2012). Many specific environmental friendly stances by many multinational companies are one of the fundamental concerns for the industry. If Toyota Motors want to sustain its name in the industry as the most sustainable company, it will have to put a lot more emphasis on the environmental factors.

Factors Affecting Toyota Motors Sustainability

Legal Factors: Toyota Motors is considered to be one of the greatest automotive companies due to its operations throughout the world. The progression and purifying of the lawful laws pertaining to the consumers have provided a great prospect for Toyota to do trade internationally in an effective way.           

The culture and principles of Toyota have the fundamentals of eliminating the waste and making a commitment towards a recycling-based society. On its Global Vision 2010, the stated firm aimed that they work on the transition from the area of large scale production and large volume consumption regarding a recycle-oriented society (Gao & Low, 2014). Toyota Motors is challenging the extensive assumption that mass production and mass depletion lead to a mass disposal by the means of reprocessing and recycle of waste resources. It is also addressing that the requirement of better utilisation of the finite possessions are consumed in such a way that it doesn’t contribute to global warming, air contamination and other methods of conservation impact (Grant, 2007). The company is currently converging on resource output enhancement by altering its manufacturing process and practices.

Toyota Motors in Singapore has established the goals in order to achieve the zero landfill waste. During the financial year 2005, the company prepared its third action plan that aimed at giving zero indirect landfill waste.

 Figure 1: Industrial Waste by Toyota Motors

Source: (Grant, 2007)

During 2003, Toyota Motors focused on better utilisation of industrial waste produced mainly from its casting process. During the year, Toyota Motors generated around 18,368 tons of manufacturing waste and was able to recycle 17,196 tons of it, which is at 94% recycling rate. It was during the same year, the company focuses on achieving the target of zero landfill waste (Heizer & Render, 2014). Toyota Motors generated 1,097 tons of direct landfill waste, which during 2003 fell to 340 tons. It clearly indicates that the aim of Toyota Motors to achieve zero direct landfill waste is within reach.

Figure 2: Direct and Indirect Landfill Waste of Toyota Motors

Source: (Gao & Low, 2014)

  The major achievement of Toyota Motors in the financial year 2003 also includes the further removal of the washing procedures from the vehicle manufacturing lines (Jaccard, 2013). The water depletion of Toyota Motors is currently less than 3.8m³ per vehicles manufactured, which has surpassed the average global goal of 4.4m³.

 Figure 3: Water Consumption

Source: (Gao & Low, 2014)

The Automotive giant is also reducing the carbon emissions from its logistics operations. It has emphasized in maximising the cargo loads, improving the transport routes and switching to alternative transport methods. It is evident that logistics operations around the globe has an immerse influence on the environment and subsidise to global warming and air pollutions through the emissions of materials of carbon (Heizer & Render, 2014). Toyota Motors has achieved the efficacy of its land-based conveyance operations by merging its shipments with the other businesses. The stated firm is optimising the shipping routes to decrease the trips and maximising the cargo loads. In addition to this, additional transport method such as rail and ship conveyance is also being progressively used. All these efforts made by Toyota Motors have enabled it in reducing its total CO₂ releases to 6.278 tons which has much lower than the global average.

Political Factors

Figure 4: CO₂ emissions

Source: (Jaccard, 2013)

The triple bottom line is one of the main structures which are presently being used by industry in order to admittance the revenues which they are making through their business sustainability explanations. The triple bottom line technique asks businesses to see outside the out-dated bottom line which the trade processes make socially, environmentally and economically (Kammel, 2015). Computing the business processes by Triple Bottom Line is one of the best indicators of how sustainable the trade is and how rewarding it really is.

Figure 5: Triple Bottom Line

Source: (Kammel, 2015)

The social bottom line procedures the business profits in human capital, which comprise the situation within the local society. Company’s bottom line upsurges by having reasonable and advantageous labour performs and through corporate communal participation. Toyota is vigorously engaging in social contribution actions in order to provision the sustainable expansion of a flourishing society with the purpose of being a good corporate citizen ("Respect for the Planet", 2015). Toyota delivers support primarily in the two areas, namely, the art and culture sphere and the social sphere. Society and culture have been in the priority areas of Toyota for the global social contribution activities.

The ecological sustainability of the Triple bottom line method summaries a view that the less influences of the business and the fewer natural possessions a company consumes, the longer and more positive the commercial would be. Governing the environmental bottom line means handling, observing and broadcasting the intake of waste and emissions ("Respect for the Planet", 2015). Everything from the Toyota’s basic posture to specific creativities is being put in the place to bettering of the environment. The corporate social responsibility of Toyota measures the business’s capability to be in the business indefinitely and its relation to the public and influence to the economy.          

Economic sustainability in the triple bottom line is not simply putting the traditional corporate capital to the ecological and human capital (Schaltegger & Wagner, 2006). The economic wealth must be dignified in terms of how much it influence the industry has on the monetary atmosphere.  

The balance between the people, planet and the profit, which is also known as triple bottom line, is a part of eventual goals of sustainable expansion of many organisations and Toyota Motors is one of them. Sustainability, which is demarcated as the meeting of the current requirements of the present without disturbing the future is normally applied in a project through approaches that meet or achieve the stakeholder’s vision and prospects (Schaltegger & Wagner, 2006). Sustainability goals and purposes are predictable to be met with an actual engagement of the stakeholders with development dignified with the utilisation of some form of valuation tools.

Economic Factors

Key environmental matters upsetting the business include the industrial waste, sustainable expansion of raw resources and water and air releases. These matters disturb the business of Toyota as laws require companies to change the apparatus and procedures to meet the obligatory criterions which cost the commercial revenue ("Sustainability Report", 2014). Toyota embarks on many strict methods in an effort to preserve the situation and to do the business accordingly. Here are some of the environmental issues that affect the business operations of Toyota Motors Corporation.

Waste: It is evident that during the automobiles manufacturing process, the procedures create manufacturing waste ("Sustainability Report", 2015). Environmental laws and good ecological citizenships forbid the indiscriminate throwing away of the manufacturing by-product, so it is significant for Toyota to select how best to distribute with the industrial waste.

Sustainable expansion of raw resources: all automobile buildings use the raw resources to put together their goods. When these raw materials are usual, laws and good ecological citizenship want that the business takes important steps to replace what its uses.

Emissions: It is evident that manufacturing procedures produce air and water releases that comprise the elements or chemical filled smoke that seep into the ground water through run-off. Environmental fortification laws need business enterprise to defend the environment from disclosure to these emissions ("Sustainability Report", 2015). All of these actions are costly to the business initiatives and affect trades by declining its profit margins.     

Any business sustainability initiative has to equalise the influence of three things: people, planet and profit, which is also known as triple bottom line and it also outline the ecological labours for many companies worldwide ("The Bottom Line on Sustainability", 2011). It is a fact that green exercises are related to the amplified costs to the industries that get passed on to the customers. But it also gets opposite sometimes. Improved efficiency, whether in energy usage, operational resources during the supply chain can often aid the associations to decrease the costs and generating a more environmentally accountable business enterprise.

Toyota Believes that sustainability and corporate social responsibility are as important as business profits. According to the managing director of Toyota, money is important as its feeds the company’s CSR and sustainability initiatives. The company has its priority areas such as education, sanitation, water environment and road safety (Thiele, 2016). The stated firm focus on few areas and try to ensure that it does the things right. The company also aims in perfecting its activities on a small scale and it is confident in scaling them.       

Social Factors

Figure 6: Sustainability at Toyota

Source: (Werbach, 2009)

The Top of the Toyota Brand is supported by its products, which represents the company’s commitment to deliver high standards of the quality to the customer’s total requirements integrating the stakeholders. The operation team of the company is responsible and dedicated to achieving success in turning out the quality cars. The products of the company represent the quality that encompasses all its activities and it also helps the company to bring sustainable product. It also operates Ecozone project that promotes biodiversity and nature.

Toyota Motors Corporation also value its supply chain, dealers and suppliers and respect the fundamentals of its relationships through teamwork and also pass on the Toyota values across all its operations (Wu, Subramanian, Abdulrahman, Liu & Lai, 2015). Toyota practices customer first approach by meeting the requirements of its customers. It also initiated a project named ‘Best in Town’ at its dealerships in order to bring excellence in its service and to meet its changing customer expectation. In pursuit of enhancing the quality of life, the company aims in building the safest car in the world with all the global standards (Wu, Subramanian, Abdulrahman, Liu & Lai, 2015). The main thinking of the company is focused on sustainability.     

A reactive approach is one where a business enterprise supports by giving donations of compensation as a one-time solution in order to address the social issue. However, this is not sustainability. A preventive approach aims in solving the societal needs by proactively taking steps by eliminating the problems of developing the infrastructure such as school building. In addition to this, a predictive approach is a sustainable approach where the main focus is on education and behavioural aspects (Wu, Subramanian, Abdulrahman, Liu & Lai, 2015). Toyota has started a program named ‘Behaviour Change Demonstration’ which is very successful. The management of Toyota believes that predictive approach works best for the company. The quality focus of the company enables them to apply the same principle of Kaizen or continuous improvement in its sustainability practices. But the key challenge for Toyota is the way to integrate the various elements of the above-outlined pyramid into its sustainability and CSR activities.  

The management of Toyota is also creating an Eco park to promote the Eco awareness and would like to showcase all its stakeholders in its commitment to deal with the environmental challenges. Toyota also places significant emphasis on looking at the stakeholders in its sustainability journey. The stakeholders of the company are engaged in all the aspects of the business. The company believes that good teamwork is the way to achieve the success (Zokaei, 2013). The company influence its dealers and suppliers through the way using the elements of kaizen to help integrate the value chain. For Toyota, the quality of life is important and they believe that quality of life could be improved through safety measures. The management of Toyota Motors Corporation value safety and embedded its significance in everything it does. Suppliers and dealers of the company are trained to provide the safety training and safety features of the company’s vehicles.               

Conclusion

It has been found in the study that Toyota Motors Corporation values its supply chain, dealers and suppliers and respects the fundamentals of its relationships through teamwork and also pass on the Toyota values across all its operations. Toyota practices customer first approach by meeting the requirements of its customers. It also initiated a project named ‘Best in Town’ at its dealerships in order to bring excellence in its service and to meet its changing customer expectation. In pursuit of enhancing the quality of life, the company aims in building the safest car in the world with all the global standards.

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