Essay About Joint Ventures And Joint Venture

Toyota
Toyota
One of the most celebrated joint ventures is NUMMI (New United Motor
Manufacturing, Inc.), a joint venture between General Motors and Toyota. It seems
surprising that the two largest competitors would even think of joining forces. GM is the
number one manufacturer in the United States as well as in the world. Toyota, on the
other hand, is number one in Japan and number two worldwide. NUMMI is a fifty-fifty
joint venture with the board of directors split equally between the two companies. Initially,
the venture was to manufacture the Toyota-designed subcompact, and the name chosen for
the car was Nova. The total number of vehicles assembled at NUMMI in 2002 was 369,856:
Toyota Tacoma (164,550), Toyota Corolla (137,642), Pontiac Vibe (59,556), Toyota Voltz
(8,108). What are the benefits each partner can expect to derive from the NUMMI joint
venture? Do you foresee any problems?
One benefit of this GM-Toyota is that it substantially reduces the amount of resources in
terms of money and personnel which each partner must contribute. The $300 million joint
venture saves GM a great deal of time and money in finding a new car to replace its aging
Chevette. Designing and tooling a new car can take three years or more and may cost $1.5
billion. The joint venture cut the time requirement in half and cost GM only one-tenth the cost
of what it would have