What Are The Benefits To The French Economy Of Toyota's Investment In France?


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Nouman Umar Profile
Nouman Umar answered
A number of factors motivated Toyota's choice of France as a location for the plant. First the company hoped that its new plant would help it to increase its market share in France from 1.1 percent in 1997 to around 5 percent. Second Toyota picked France because the country has long had an indigenous automobile industry which yields an adequate supply of trained labor and technical expertise along with a network of experienced subcontractors.

Third the French government reportedly offered considerable subsidies to induce Toyota to invest in the country. These included taxes break the waiving of some social security contributors and financial aid for training the work force. In addition the city of Valenciennes where the plant is located waived or significantly reduced the annual property tax on the site.

An estimate suggests that these subsidies reached 10 percent of the value of investment. Fourth one of the most important attractions of France was the priority establishing a presence not only within Europe's single market. But also within the Euro single currency zone. Great Britain continued ambivalence to monetary unions with European countries was the big hindrance to Toyota investing further in the Untied Kingdom. So this is how the Toyota entered in the France.
Robert Lamp Profile
Robert Lamp answered

Toyota in France Background In late 1996, Toyota began to look at the whole of western Europe for a site for its ultra-modern plant. Belgium, the Czech Republic, France, Germany, Poland and the UK all seemed to be the most promising investment recipient, but the list was quickly left a head-to-head battle between Europe’s oldest foreign investment rivals – France and the United Kingdom. At first, the UK seemed the obvious choice. Toyota had its only European car assembly plant at Burn aston, in the UK’s Midlands, where a skilled workforce and well-established automotive infrastructure and cluster of related firms are available. However, at the end of January, company president Hiroshi Okuma voiced doubts about investing in the UK because of its hesitation to fully participate in the European monetary system. In 1997, Toyota finally announced plans to build a $660 million car plant in Valenciennes, 60 km from Lille, France.

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