Example #1: Toyota

Toyota is the worlds leading automaker. It is headquartered in Japan and its brands include Toyota, Lexus, Scion, etc. In 2009, Toyota employed 320,800 people and its sales were 20.529 trillion.

Toyota has factories all over the world and sells cars in more than 140 countries. Toyota is mainly engaged in horizontal FDI. Its production system relies on fully-owned assembly plants, which obtain components and parts largely from external suppliers.

Why does Toyota horizontally fragment its production process? Why does Toyota control and manage its foreign production facilities?