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Why did Derbyshire and Flintshire prove to be such an attractive proposition for Toyota?

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Introduction

Why did Derbyshire and Flintshire prove to be such an attractive proposition? Toyota Motor Manufacturing (UK) Ltd. - "Derbyshire were offering a site of almost 600 acres at Burnaston - about 7miles from Derby city centre - on a relatively flat and easy to develop piece of land. The site chosen for engine production was the right size and shape on a well prepared industrial park 7 miles from Chester. Both locations offered good transportation links to all parts of the UK and Europe. We were made aware of the availability of a large skilled and flexible workforce close with strong roots in engineering and manufacturing and a first class environment in which to live and work. The local authorities also showed great enthusiasm and willingness to assist. The sites not only provided and effective infrastructure to enable us to operate i.e. electricity, gas, water, telephones but also business and personnel support services to help the Company and its people to integrate into the local communities." When choosing a location the firm ultimately looks at cost, (least-cost site). This concept is the idea of choosing a location that allows a firm to minimise its costs and hence its selling price. All the factors they will examine directly or indirectly will be linked to this factor. ...read more.

Middle

Also the further away from London the cheaper the land cost. As you can see where the Toyota plant is located far enough away to benefit from reduced wages, land costs, transport etc. but to still have adequate links with transport hubs, airports stations, and ports. In their Derbyshire location Toyota invested �1.15 billion and acquired a 580 acre plot, adequate to reach production levels of 282,215 vehicles. The concept here is economies of scale, Derby offered this amount of land and Toyota have been able to reach production levels high enough to create a low unit cost. Distances of airports from Derby by road Miles Time (hrs/mins) Nottingham East Midlands Airport 10 0.15 Birmingham Airport 44 1.00 Manchester Airport 75 1.30 From Derby to Ports by road Miles Time (hrs/mins) Boston, Lincolnshire 72 1.20 Goole Docks, East Yorkshire 72 1.20 Mersyside, Garston Docks 85 1.40 Port of Hull, Kingston Upon Hull 94 1.45 Immingham, Lincolnshire 95 1.45 Fleetwood Docks, Lancs 121 2.20 Bristol, Avonmouth Docks 134 2.25 Southhampoton, Town Quay 172 3.20 Felixstowe Docks, Suffolk 175 3.15 Dover, Kent 215 3.50 Toyota is a Japanese firm and hence it will be very important to have Japan accessible for personnel reasons. Senior management will need to be able to stay connected with the plant to keep the firm focused. ...read more.

Conclusion

For example the labour skills with the skills necessary for this particular industry, this reduces training costs. Specialist training facilities, so that travel is reduced for training needed. Infrastructure that is directed towards that particular industry for example specialist transport facilities (heavy load lorries for metals needed for car manufacturing). Customer base locally, means you are close to the customers, especially important for design to give the customer what they want (the Yaris was designed specifically for the British consumer for their specifications and was very successful). The reputation of the area also means customer trust however in the Toyota case the brand name is far more valuable. However this can also be a negative point - external diseconomies of scale. Congestion of lorries can mean pollution hence poorer quality of life and more time consumer travel for example what the London area is suffering from - solved through expensive congestion charging. Derby attracted Toyota not just because of the statistics showing infrastructure, available land and skills but because of the enthusiasm of the council. There is a lot of information and contact numbers available on their website, which was also advertising grants and general help for businesses this suggests they were willing to accomidate Toyota in return for the jobs and wealth brought to the area, I think this would have been a hugely deciding factor for Toyota to locate to Derbyshire over other UK locations. ...read more.

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