OVERALL VIEW ON MARKET COMPETITIVENESS, CORECOMPETENCY AND COMPETITIVE ADVANTAGE BETWEEN TOYOTA, VOLKSWAGEN AND GENERAL MOTORS COMPANY:

1.INTRODUCTION:
Here we are discuss about the Market Competitiveness, Core competency and Competitive Advantage of the major automobile companies TOYOTA, VOLKSWAGEN and GENERAL MOTORS COMPANY. 1.1COMPARISON OF SALES OF LIGHT VEHICLE BETWEEN TOYOTA, VOLKSWAGEN AND GENERAL MOTORS

1.2BRIEF INFORMATION:

2. COMPANIES IN BRIEF
2.1 TOYOTA: In April 1935, 75 years ago he laid the foundation of Toyota, namely Sakichi Toyoda with his son, Kiichiro Toyoda automotive engine successfully completed the first prototype, named Type A. Type A machine which completed the process in April 1935, the cost of development is only obtained from small households, which was pioneered by Sakichi Toyoda, a yarn spinner tool. Thanks to this dynasty, Toyoda looms could realize his dream of making cars. A year later or rather April 1936, Kiichiro began mass-producing the first car, with the name A1. Not only cars, in the same month also produced a mini truck with the nickname G1. Apparently response to the public from Toyoda product was beyond expectations. Both the first automotive products get good response from the community. Armed with the positive progress that is, Kiichiro had founded the Toyota Motor Corporation Ltd., on August 28, 1937. Kiichiro deliberately replacing the letter 'D' on Toyoda with 'T', because he wanted a name is easier said Toyota pronunciation. With an easy pronunciation, then Kiichiro hope that Toyota will easily attached to the minds of consumers. Kiichiro confidence now becomes a reality. Toyota became the world's largest automotive manufacturer with a variety of products in various countries. It turned out to achieve the success it is today a long road winding nan that unpleasant also been adopted by the founder of Toyota.

2.1.1 Financial results:

Total Calendar Year Production Sales

Japan

United States

Production

Sales

Sales

2008

9,225,236[10]

4,911,861[10] 2,153,197[10] 2,217,662[11]

2009

7,234,439[12]

3,543,199[12] 1,996,174[12] 1,770,147[13]

2010

8,557,351[14] 8,418,000[15] 4,047,343[16] 2,203,849[16] 1,763,595[17]

2.2 VOLKSWAGEN: VW Group with its headquarters in Wolfsburg is one of the worlds leading automobile manufacturers and is the largest carmaker in Europe. Literally, Volkswagen means "people's car" in German. This company has established in 1937 by the National Socialist trade union. In 2007, the Group delivered to customers 6.189 million vehicles and provided around 10 percent share of the world automobile market. Volkswagen obtained 19.5 percent market share of the Western Europe. Volkswagen moved its production toward green technology innovation in 2003 by selling low sulphur diesel-powered engines in the European market. They developed Turbocharged Direct Injection (TDI) technology. This modern diesel engine consumes 30 percent less than gasoline engines that resulted in reduction of greenhouse gas emissions. Volkswagen also developed hybrid technology for diesel-electric cars by Golf (Wikipedia 2010). VW plans to introduce Golf, Passat and Touareg hybrid until 2013. Recently, Volkswagen has achieved BlueMotion technology to protect environment and resources. Figure 1 reveals that this company has increased its sales in the 2010 compared to 2009. 2.3 GENERAL MOTORS: The company was founded on September 16, 1908, in Flint, Michigan, as a holding company for Buick, and then controlled by William C. Durant. At the turn of the 20th century there were fewer than 8,000 automobiles in America and Durant had become a leading manufacturer of horse-drawn vehicles in Flint, MI, before making his foray into the automotive industry. GM's co-founder was Charles Stewart Mott, whose carriage company was merged into Buick prior to GM's creation. Over the years Mott became the largest single stockholder in GM and spent his life with his Mott Foundation which has benefited the city of Flint, his adopted home. It acquired Oldsmobile later that year. In 1909, Durant brought in Cadillac, Elmore, Oakland and several others. Also in 1909, GM acquired the Reliance Motor Truck Company of Owosso, Michigan, and the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessors of GMC Truck. Durant lost control of GM in 1910 to a bankers' trust, because of the large amount of debt taken on in its acquisitions coupled with a collapse in new vehicle sales. The next year, Durant started the Chevrolet Motor Car Company and through this he secretly purchased a controlling interest in GM. Durant took back control of the company after one of the most dramatic proxy wars in American business history. Durant then reorganized General Motors Company into General Motors Corporation in 1916. Shortly after, he again lost control, this time for good, after the new vehicle market collapsed. Alfred P. Sloan was picked to take charge of the corporation and led it to its post-war global dominance. This unprecedented growth of GM would last into the early 1980s when it employed 349,000 workers and operated 150 assembly plants.

GM led global sales for 77 consecutive years from 1931 through 2007, longer than any other automaker. In 2008, 2009, and 2010, GM has ranked as the second largest global automaker by sales. The company regained its position as the world's largest automaker, by vehicle unit sales, in 2011.

3. MARKET COMPETITIVENESS:
3.1 TOYOTA: 3.1.1 Cost Reduction Activities: Toyota has grown market support through unflagging cost reduction efforts focused on all of its models, including Toyota's signature global car: the Corolla. Our quest to make better products less expensively goes on. 3.1.2 Shifting from Item-Based to Systems-Based Innovation: Toyota has achieved outstanding results by working in partnership with component manufacturers and other suppliers to advance the CCC21 (Construction of Cost Competitiveness for the 21st Century) all-round cost reduction activity since 2000. Thanks to those efforts, we have seen annual cost savings of about 200 billion, peaking at almost 300 billion in fiscal 2003. Building on that proven track record, Toyota began the VI (Value Innovation) activity in April 2005. 3.1.3 Accelerating Cost Reduction Efforts Based on Mutual Trust: A feature of Toyota's cost reduction activities is that rather than focusing purely on price reductions, they initiate a chain of manufacturing innovation that reaches all the way back to the design and development stages. As a result, such initiatives involve collaboration among suppliers and a wide range of the Company's divisions, including design, production engineering, and purchasing. By significantly improving efficiency and lowering costs, that dynamic, multifaceted cooperation is a driver of our products' growing competitiveness. 3.1.4 Returning Cost Reduction Benefits to Customers: Toyota's cost reduction programs generate far more benefits than just cost savings. We return the benefits of cost reductions to customers by ploughing the freedup resources back into product upgrades or price repositioning. In other words, bottom-line cost savings amounts only show a part of the overall benefits generated by cost reduction activities. That process of converting savings into higher quality enables us to offer new models with markedly improved functionality and performance at prices that are the same or lower than before.

3.1.5 Continuous Improvement: Toyotas manufacturing prowess is legendary in the automotive industry and even beyond. Their philosophy of continuous improvement (called Kaizen) has been adopted (or at least attempted or considered for adoption) by any large-scale manufacturer. Specifics like the empowerment of any factory employee to pull a cord (called the Andon) and stop an entire assembly line when a defect is noticed are also emulated by many.

Two global trends are likely to dramatically alter this competitive edge that Toyota has enjoyed for some decades now.
1. First, by emulating Toyota as best as they can, the Detroit Three and South Korean carmakers have been able to narrow the quality gap over the years. 2. A modern automobile is increasingly a networked computer platform on wheels. By 2015, roughly a third of an automobiles value will be in its electronics. As some of my earlier posts emphasize, electronics, despite their potential occasional glitches, is what makes modern cars better in terms of fuel efficiency, safety, emissions and other functions. We are not going back to the past. But, electronics and software design is not just a manufacturing issue; an andon cord in the assembly line will not detect an electronic design problem or a software bug. The decisions that get made months and years ahead of the assembly process are what make the difference. As of now, no car company including Toyota has a major lead on this underlying technology (of building s0-called cyber-physical systems that automobiles increasingly are). Toyota does not have a technology lead on software development for these systems either. Any advances from a Toyota supplier are also easily accessible to other carmakers because of a global supply chain in todays interconnected economy. In other words, the future of automotive competitiveness is wide open from a quality/technology perspective. Anybody can get ahead in this race. Sound and strategic investments to both develop new electronics/cyber-physical systems technologies and train engineers/developers on these technologies are what will make a difference.

3.2 VOLKSWAGEN:

3.2.1 Emerging markets: VWs emerging market strategy has brought positive results. From its assembly base in East Europe to its top position in China, VW is well placed for stable emerging market growth. 3.2.2 Pricing Power: Few mass-market VBEs can claim VWs level of premium pricing. This should continue as VW moves its brands up market and enters new profitable segments of the market, such as SUVs. 3.2.3 Product Quality: VWs reputation for product quality, especially in West Europe, has allowed VW to gain market share both in and outside of Germany. Skodas growth can also be attributed to this reputation. 3.2.4 Platform Sharing: VW is the industry benchmark in terms of platform-sharing. As other VBEs rush to catch up, VW will focus on product differentiation within a platform-sharing strategy, thus staying out front. 3.2.5 VW Group Globalization Strategy: West Europe VW is aggressively gaining market share in West Europes main markets outside of Germany Skoda and Seat are seen as key competitors for brands such as Peugeot, Renault and Fiat in France, Spain, Italy and the UK East Europe VW will finally be tempted by the riskier markets of Russia and Ukraine Central Europe, however, will remain a key facet of the groups European assembly plans North America VW will continue to seek profitable growth through Audi and VW products such as the new Tuareg SUV

South America The Seat brand will play a key role in VWs regional growth strategy Asia-Pacific VW will continue to focus on China Their flirtation with India will remain little more than that over the near term. 3.3 GENERAL MOTORS: Due to GM's global presence and diversity of products, the company competes in one way or another with every mass auto producer. As explained above, GM's non-U.S. operations are managed with considerable independence from Detroit, often developing their own cars, funding investment from in country profits, and negotiating for subsidies or bailouts with host country governments. Yet the biggest threat is still from foreign companies. The influx of foreign cars into the US market has had huge ramifications for the Big Three. The UAW's old method of keeping the Big Three in check, by demanding steep concessions whenever a clear leader seemed to emerge, worked both to placate workers and to maintain balance in the US auto industry. However, foreign companies now account for more than half of the US auto market. Now, UAW demands do no more than put Big Three companies at a direct and pronounced disadvantage. Foreign companies like Toyota and Nissan are poised to dominate the mainstream, smallto medium-sized car market with their flexibility, cheaper prices, and (in Toyota's case), early investments in fuel efficiency. Cars like the highly successful Toyota Prius are a big challenge for GM's own Saturn hybrids. GM will also have to fight these newcomers in what remains of its highly lucrative gasoline-based SUV/trucks sector.

4. COMPARISON OF US CAR MARKET SHARE BETWEEN TOYOTA, VOLKSWAGEN AND GENERAL MOTORS:

5. COMPARISON OF US CAR TRUCK MARKET SHARE BETWEEN TOYOTA, VOLKSWAGEN AND GENERAL MOTORS:

6. CORE COMPETENCY:
6.1 TOYOTA: Toyotas core-competencies lie in achieving excellence through continuous improvement and waste reduction. Toyota followed five strategies for becoming the number one carmaker in the world -Strategy One: Kaizen Kaizen means continuous improvement. Many companies neglect to take kaizen seriously, and those companies are not industry leaders. Kaizen is the single most important manufacturing philosophy in the world today. Why so many companies refuse or neglect to practice it? The answer to that may take several forms:

6.1.1 KAIZAN: First, kaizen is expensive in the short run. For example Toyota practices of shutting down the production line whenever any significant breach of quality is detected. Many manufacturers would rather fix defects at the end of the line-or send their defective products into the marketplace and hope for the best-than stop the line. In long run of course, kaizen is the optimum method for building profits. 6.1.2 JIT Strategy Two: Just In Time (JIT) - Taiichi Ohno, built his processes on the theme of waste. He once classified production waste into seven categories: Overproduction Waste machine time Transportation waste Processing waste Taking inventory Inefficient motion Defective components 6.1.3 THE SUGGESTION SYSTEM Strategy Three: The suggestion system - No one on the earth knows the task better than the worker performing it. Henry Ford probably liked the fact that he was receiving inputs on improving the line for free. Eiji Toyota liked the idea of turning every employee into a Quality Circle (QC) expert. 6.1.4 KANBAN: Its a pre-computer concept still in use at Toyota worldwide because it works beautifully. When a part is used, the worker can send the kanban back upstream as a record of what part was used and as an order for a new one. This system reduces communication time and prevents most problems because the status of a part is clear and instantly observable. 6.1.5 ASK YOUR CUSTOMER: Many successful companies understand intuitively that customers are more than passengers on board. Customers provide the population, decides what course to take, and also steer the ship. And once in a while, when the mood strikes them, customers abandon the ship for another.

6.2 VOLKSWAGEN: 6.2.1 BlueMotion Technology in VW Models: BlueMotion is a trade name for Volkswagen car models with an emphasis on higher fuel efficiency. The term BlueMotion comes from Volkswagen Groups official color, blue, and motion added to denote mobility. BlueMotion technology was introduced on the Mk4 Polo BlueMotion Auto show by Volkswagen in 2006. Passat is another BlueMotion model that has been released in 2007. This technology represents the interaction of several innovations, such as recuperation, the start-stop system and nitrogen oxides exhaust treatment. BlueMotion technology makes cars more economical with reduced emissions. The BlueMotion technology is based on these three areas of improvement: 1- Engine: Diesel particulate filters and oxidizing catalytic convertors reduce the fuel consumption with lower nitrogen oxides levels. Moreover this technology, start-stop system halts restarts the motor at short stops like red lights. 2- Transmission: The last two gear ratios are longer than standard Turbocharged Direct Injection (TDI) engine gearboxes. 3- Reduced rolling resistance: Low-resistance wheels and better aerodynamic shape through lowered suspension, new spoilers and extra enhancements underneath car produce better fuel consumption. Passat has been dubbed as the most environmental friendly available car in the world (BlueMotion Website 2008). This model creates the lowest CO2-emitting among other models. VWs start-stop system saves fuel by turning a car's engine off when the driver stops completely. The Passat BlueMotion offers small body changes for less drag, which reduces petrol consumption through more aerodynamic spoilers, bumpers, and grills and lower suspension. BlueMotion cars also offer regenerative breaking and low rolling resistance wheels (Lombardi 2010). Its fuel consumption is nearly 4.9 per 100 kilometers with only 128 gram carbon dioxide emissions per kilometer. Passat BlueMotion via a 105bhp TDI engine and its unique diesel particulate filter helps the car to pass the mountain easily even when the car is fully laden. Passat BlueMotion was ranked the top 3 of the World Green Cars 2008 in the New York International Auto Show. According to its considerable fuel efficiency and low carbon dioxide emissions, the Passat fended off competition from many hybrid models and fuel cell vehicles such as Toyota and Honda (Volkswagen Group 2010)

Eco-Friendly Products and Technologies under One Umbrella

6.2.2 ENGINE TECHNOLOGIES AND PLATFORM TECHNOLOGIES:

6.3 GENERAL MOTORS: Over the past century, two of the primary ways that carmakers have been able to distinguish their products is styling and powertrains. While styling has often been outsourced to various design studios, typically only the smallest automakers outsource powertrains. As the industry heads into the era of increasing electrification, the whole concept of the powertrain is evolving.

General Motors has decided that powertrains will remain one of its core competencies whether they are based on internal combustion or transferring electrons. To that end, GM has announced that it will become the first U.S.-based automaker to design, develop and manufacture its own electric motors. GM will invest $246 million on a high volume motor production facility that starts production for 2013. During a background briefing, GM's Pete Savagian explained that a fuel tank in a conventional vehicle corresponds to the battery of an EV, while the engine controller equates to the power electronics and inverter and the internal combustion engine is analogous to the electric motor. All of these are core powertrain elements and GM has already announced it will produce its own battery packs and electronics.

Building a basic electric motor is not very hard. Building a good electric motor suitable for use in an electric or hybrid vehicle is a lot more complicated. The operating environment for a car is among the most varied for any consumer product. Creating a product robust enough to last two decades under widely varying temperatures, vibration and usage patterns is a non-trivial matter.

GM has decided that it must take a more active role in motors in order to ensure that the electrical analog of the engine meets its strict requirements. Because the battery retains extraordinarily poor energy density compared to any liquid fuel, the engineers must make up for it in other areas including the motor. Savagian highlighted the power density of the motor as critical. GM's motor engineers are working to improve power density with a goal of doubling it in the coming years. Getting more power from smaller motors allows for more packaging flexibility while also keeping weight down.

7.COMPETITIVE ADVANTAGE: 7.1 TOYOTA: 7.1.2 COST LEADERSHIP: LEAN SUPPLY CHAIN MANAGEMENT [Toyota Indonesia Case]

GOAL of LEAN ACTIVITY COST REDUCTION PROFIT INCREASE

As Basic Philosophy (1) SALES PRICE = COST + PROFIT (2) PROFIT = SALES PRICE - COST

PROFIT

= SALES PRICE - COST

SO IN TOYOTA, PRESSING THEIR PRODUCTION COSTS TO INCREASE PROFITS, NOT WITH raise the price, BECAUSE IF THE PRODUCT PRICE increased, WILL AFFECT CONSUMERS BY PEMBELILIAN volume 7.1.3 14 Principles of the Toyota Way. 1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals 2. Create a continuous process flow to bring problems to the surface. 3. Use pulls systems to avoid overproduction. 4. Level out the workload (heijunka). Work like the tortoise, not the hare. 5. Build a culture of stopping to fix problems, to get quality right the first time 6. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. 7. Use visual control so no problems are hidden. 8. Use only reliable, thoroughly tested technology That serves your people and processes. 9. Grow Leaders WHO Understand thoroughly the work, live the philosophy, and teach it to others. 10. Develop exceptional people and teams WHO follow your company's philosophy. 11. Respect your extended network of partners and Suppliers by Challenging Them and Helping Them Improve. 12. Go and see for yourself to thoroughly understand the situation (Genchi Genbutsu). 13. Make decisions SLOWLY by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi). Become a learning organization through Relentless Reflection (hansei) and continuous improvement (kaizen). 6.4 VOLKSWAGEN: 6.4.1 Fuel-Efficiency: Volkswagen is the first automaker to offer a clean diesel car certified in all 50 states. The Jetta TDI and Jetta TDI SportWagen get 29 mpg city and 40 mpg highway, according to 2009

EPA estimates. The Jetta 2.5L, New Beetle, Passat Sedan and Wagon, CC and EOS each have EPA highway mpg estimates of 29 mpg. The all-new Routan minivan equipped with the 4.0L V6 receives class-leading EPA mpg estimates of 17 mpg city and 25 mpg highway. 6.4.2 Safety: Volkswagens Prevent and Preserve safety system is standard on every 2009 Volkswagen.The Jetta, Jetta SportWagen, Passat Sedan/Wagon, Eos and Tiguan were all named Top Safety Picks for 2009 by the Insurance Institute for Highway Safety. ESP (Electronic Stabilization Program) is standard on all 2009 Volkswagen models; 3 years before the National Highway Traffic Safety Administration mandated it on all vehicles by 2012.