TOYOTA CITY, Japan-- Toyota Motor Corp. broke a two-year silence
on a revamped manufacturing process--built on sharing components
among vehicles--that the world's best-selling auto maker says will
produce half its vehicles by 2020 and slash costs.
But its unveiling follows a path blazed in recent years by
German rival Volkswagen AG--a reversal for the Japanese pioneer,
whose production system was for decades seen as the gold standard,
giving the world such manufacturing concepts as "just-in-time
inventory" and "continuous improvement."
Toyota said the first vehicle to be launched under the new
program, known as Toyota New Global Architecture, will be built on
a platform for midsize cars such as the Prius. Executive Vice
President Mitsuhisa Kato said Toyota's luxury-brand Lexus vehicles
will also be made under the system.
"This has been a period to rebuild Toyota's development and
manufacturing procedures," Mr. Kato told a briefing at Toyota's
headquarters in central Japan. "The entire company is working on a
structural reform so that we can grow in a more sustainable
way."
Toyota didn't specify how much savings the cost cuts are
expected to deliver.
A decade ago, Toyota was confident about its rapid growth,
backed by its ability to offer affordable and reliable vehicles and
its manufacturing prowess. But that confidence was shattered by a
series of crises the auto maker faced in the late 2000s.
When the global financial crisis struck in late 2008 and auto
sales plunged world-wide, Toyota struggled with high fixed costs
stemming from excess production capacity as a result of its rapid
expansion. That year Toyota posted its first annual operating loss
in 70 years.
A year later, Toyota found itself embroiled in a spate of safety
recalls after complaints over unintended acceleration in its
vehicles.
These crises prompted Toyota to revamp its vehicle-development
strategy under a motto set by President Akio Toyoda: make
"ever-better cars." Mr. Toyoda also froze investments in new plants
for three years from 2013, saying Toyota needed to improve
productivity before expanding again.
As Toyota developed its new manufacturing process, it found
itself chasing Volkswagen, the world's second-best-selling auto
maker, which had launched in 2012 vehicles built on its own new
global manufacturing platform. That system, known as MQB, was
already utilizing sharing of components across multiple brands and
vehicles.
Hirohide Nakagawa, a Toyota engineer involved in platform
development, said Thursday that in 2012, when Volkswagen started to
sell its first vehicles built under MQB, Toyota engineers
benchmarked and studied them carefully, at times adjusting its own
development targets.
"We are coming into the game later than them, so our products
have to be better than theirs," he said. For instance, Toyota aims
to improve the ride quality of its vehicles under the new program,
and it set a more aggressive target for noise and vibration
reduction after studying Volkswagen vehicles, he said.
Toyota said its new program will reduce costs in several ways.
The introduction of smaller manufacturing lines, for instance, is
expected to reduce initial plant investment by approximately 40%
compared with 2008 levels, Toyota said.
Toyota said it plans to increase the use of same or similar
components across vehicles, regardless of size and segments,
allowing it to order parts in bulk and save costs through economies
of scale.
The auto maker said it is also opening more business to
suppliers outside the Toyota group, including European companies.
For instance, German supplier Continental has recently started to
supply Toyota with a new crash-prevention system, alongside with
Toyota group supplier Denso, Toyota said.
Mr. Toyoda said in January that Toyota would likely end its
self-imposed three-year freeze on investment in new plants soon.
Toyota executives and people familiar with the matter have said the
auto maker is considering investing in Mexico and China.
Toyota last month raised its full-year profit forecast to a
record Yen2.7 trillion ($22.77 billion) on yen weakness and solid
U.S. sales.
Write to Yoko Kubota at yoko.kubota@wsj.com
Access Investor Kit for Continental AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0005439004
Access Investor Kit for Volkswagen AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007664005
Access Investor Kit for Volkswagen AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=DE0007664039
Access Investor Kit for DENSO Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3551500006
Access Investor Kit for Toyota Motor Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3633400001
Access Investor Kit for Continental AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2107712000
Access Investor Kit for DENSO Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US24872B1008
Access Investor Kit for Toyota Motor Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US8923313071
Access Investor Kit for Volkswagen AG
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9286623031
Subscribe to WSJ: http://online.wsj.com?mod=djnwires