New United Motor Manufacturing

One of the most celebrated joint ventures is New United Motor Manufacturing, a joint venture between General Motors and Toyota established in the early 1990’s. It seems surprising that the two largest competitors would even think of joining forces. During this time, 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?