Toyota and FAW restructure management system of joint venture

China First Automobile Group Co., Ltd. (hereinafter referred to as FAW) and Toyota Motor Company (hereinafter referred to as Toyota) announced their decision to restructure the management system. Tianjin FAW Toyota Motor Co., Ltd. (TFTM) will become the overall enterprise of FAW Toyota, including Sichuan FAW Toyota Motor Co., Ltd. (sftm Chengdu) and Changchun Fengyue company (sftm Changchun) Tianjin FAW Toyota engine Co., Ltd. (tftE), FAW Toyota (Changchun) Engine Co., Ltd. (ftce).
“Next year, FAW Toyota’s joint venture will usher in the 20th anniversary. In order to make FAW Toyota sustainable development, after consulting with FAW, Toyota decided to carry out this restructuring.” The Chinese head of Toyota Motor said.
In fact, in order to improve the management efficiency and adapt to the rapid changes in the Chinese market, FAW Toyota and FAW have long planned to restructure the management system. The relevant person in charge of FAW Toyota has repeatedly expressed that he will “rebuild a FAW Toyota”. After the completion of the restructuring, Tianjin FAW Toyota Motor Co., Ltd. will become a market operation company integrating manufacturing, R & D and sales.
Personnel changes followed
According to qixinbao information, Sichuan FAW Toyota Motor Co., Ltd., Tianjin FAW Toyota engine Co., Ltd. and FAW Toyota (Changchun) Engine Co., Ltd. are joint ventures between China First Automobile Co., Ltd. and Toyota Motor Co., Ltd. After restructuring the management system, the above-mentioned vehicle and engine manufacturing enterprises of FAW Toyota will be incorporated as a wholly-owned subsidiary of Tianjin FAW Toyota Motor Co., Ltd.
At the same time, FAW Toyota Technology Development Co., Ltd. (ftrd), the R & D company of FAW Toyota, will also take this opportunity to become a wholly-owned subsidiary of TFTM. According to qixinbao information, FAW Toyota Technology Development Co., Ltd. is a joint venture between Tianjin FAW Toyota Motor Co., Ltd. and Sichuan FAW Toyota Motor Co., Ltd., with shares of 80% and 20% respectively.
In addition, the sales company of FAW and Toyota, namely, FAW Toyota sales Co., Ltd. (FTMS), has no change in capital, but in terms of specific business, it will report to FAW Toyota Motor Co., Ltd. in order to realize management integration, so as to establish a system of development, production and sales.
On April 27, the relevant person in charge of Toyota China said in an interview with “daily economic news” reporter: “the above FAW Toyota enterprises are independent legal entities, and each has its own board of directors. After the reorganization, the management and reporting system of FAW Toyota will be clearer and clearer. ”
According to the above-mentioned relevant person in charge of Toyota China, with the restructuring of management system, FAW Toyota enterprises will have a series of new personnel changes in addition to changes in the equity structure.
The reporter learned that FAW Toyota is a business entity with eight independent legal entities. In order to achieve a common goal, it forms a cooperative association relationship, which is also a traditional mode of Toyota’s operation in other countries in the past.
Toyota believes that the restructuring is to achieve the best production system, improve resource and strategic efficiency, and then enhance competitiveness to cope with the rapidly changing market environment in China through the unified management of production enterprises by TFTM. In addition, the reporting process will be more clear after the reorganization, so as to strengthen the management of each enterprise by TFTM and accelerate the decision-making.
GAC Toyota does not follow suit
As a matter of fact, FAW Toyota and FAW of China have long planned this restructuring. With the change of the market environment, the disadvantages of the cooperation and association relationship between FAW Toyota enterprises are constantly exposed. From the perspective of vehicle manufacturing, FAW Toyota includes Tianjin FAW Toyota Motor Co., Ltd., Sichuan FAW Toyota Motor Co., Ltd. and Changchun Fengyue company, and FAW Toyota sales Co., Ltd. is responsible for marketing. With the continuous intensification of market competition and the rapid change of China’s consumer market, problems such as coordination and efficiency are constantly exposed in the parallel cooperation relationship of FAW Toyota.
It is based on this, FAW Toyota will carry out a “second venture”. Wang Gang, former general manager assistant of China First Automobile Group Corporation and executive deputy general manager of Tianjin FAW Toyota Motor Co., Ltd., once said in an interview with the media: “in the past, we separated production and marketing and ate in different stoves, but the goal is the same. Now we need to integrate it, because the cost of communication is too high and the efficiency of operation is too low. We can’t keep up with the rapid and changeable national policy guidance and the rapid and changeable market demand. Therefore, under the guidance of problems, we feel that we must integrate them. ”
Will GAC Toyota follow FAW Toyota’s example? The relevant person in charge of Toyota China denied this: “GAC Toyota is not involved in this issue. In one company of GAC Toyota Motor Co., Ltd., there are two functions of production and sales.”
Qixinbao data shows that GAC Toyota Motor Co., Ltd. holds 100% of the shares of GAC Toyota Motor Sales Co., Ltd., so the production and sales of GAC Toyota have already realized integration, and the management structure is relatively clear.
According to the public data, FAW Toyota’s cumulative sales volume in 2019 will be about 738000, with a year-on-year increase of 2%; GAC Toyota’s cumulative sales volume in 2019 will be about 682000, with a year-on-year increase of 18%.
The year of 2019 is the first year of FAW Toyota’s “second venture”. The company has defined five major strategies of “tnga, new energy, intelligent Internet connection, mobile travel and system structure reform” to continuously expand the production and marketing plan