Toyota Motor Corporation: Toyota is a Japanese automaker headquartered in Toyota, Aichi, Japan. In 2013 the multinational corporation consisted of 333,498 employees worldwide and, as of March 2013, is the thirteenth-largest company in the world by revenue. Toyota was the second-largest passenger automobile manufacturer in 2012 (by production), the largest in overall production including commercial vehicles and in July of that year, the company reported the production of its 200-millionth vehicle. As of November 2013, it is also the largest listed company in Japan by market capitalization.
Toyota's operations are subject to currency and interest rate Ã¯Â¬Âuctuations and financial risk: Fluctuation in foreign exchange rates poses a great challenge. These changes may affect its pricing strategy and hugely the cost of raw materials in foreign currencies. This leads to translation and transaction risk through the unstable of the exchange rate and therefore influence the consolidated financial statements that are presented in Japanese Yen.
Also, the Japanese Yen has appreciated against major currencies. This may lead to the perception of its products being expensive globally.
Risk Prevention: Toyota uses derivative financial instruments including interest rate swaps and increased localised production of its products, value-at-risk analysis, forward contracts, hedging and netting.
Toyota may be adversely affected by the continuing effects of the Great East Japan Earthquake and ensuing events: The Japanese economy as a whole suffered from the damage of this earthquake. Toyotas operations may be affected by this due to the earthquakes destruction of nuclear energy plant which reduced and lead to rationing of energy in Japan.
Risk Prevention: Toyota mitigates this risk by diversifying to regions where risk of natural disasters is low.
The worldwide automotive market is highly competitive and highly volatile: The highly intense competition in the global automotive industry may lead to lower sales due to...