Toyota wants a new business model in Europe
Toyota is renowned for its supplier relations, long-term strategies and that favourite Japanese corporate import, kaisen. But Emile Benaim, European vehicle logistics director, reveals the recession threatened all of that. Read about the changes he is hoping to put into place for this year.
Toyota’s recent struggles in Europe had forced the carmaker to revert to short-term strategies for its outbound operations. But Benaim explains that he is worried some providers are pricing themselves too low to survive.
There are many reasons why a logistics provider might fail in its bid to gain business with a carmaker: poor visibility across the supply chain from out-of-date IT systems; a lack of experience in a certain market; or, the most familiar, offering the wrong price. But a provider might be surprised to learn that its quote was too low, rather than too high. But that is precisely the words that have been on the lips of Emile Benaim, Toyota Motors Europe’s (TME) director of vehicle logistics.
In a European market flooded with excess transport capacity this year, Benaim has seen new entrants try their best to undercut one another in a price war for the business in play, in some cases offering deals at such low prices that they are, in his words, “really crazy”.
For Benaim, an industry veteran with more than 20 years sales, marketing and logistics experience with Ford, Fiat and Toyota, those offers are tempting. Although Toyota Motor Corporation registered a surprise profit in the July-September 2009 quarter, it remained in the red for the year. TME’s losses at the financial half year were ¥18.6 billion ($206m, €139m).
But logistics at too low a price is also dangerous. Benaim is not convinced that the offers made by some of the providers are sustainable and he fears that, in the long run, logistics providers might not be able to maintain the service.
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