Toyota eyes growth after recall spinout
TOYOTA, Japan - After extended introspection at the world's biggest automaker, Toyota says it has put its massive recalls behind it and is preparing to re-engage its growth engine once again.
The Japanese company outlined a new "architecture" Thursday centered on product development and manufacturing initiatives it hopes will be more fail-proof against quality problems, and allow it to keep growing in a sustainable way.
The first cars under the system, medium-sized front-wheel drive cars, will roll out later this year, and will be expanded to half its lineup by 2020, Toyota Motor Corp. said.
Executive Vice President Mitsuhisa Kato acknowledged that managing the company's global scope and model lineup had become an increasing challenge.
"It is making our effort to come out with ever better cars increasingly difficult," he told reporters at its headquarters in Toyota city, central Japan.
He pointed to how President Akio Toyoda had decided to take an "intentional pause" in rapid growth to strengthen the automaker's competitiveness.
The recall fiasco resulted in more than 10 million vehicles being recalled around the world, mostly in the U.S., for a range of problems including faulty brakes, sticky gas pedals and ill-fitting floor mats. Toyota paid penalty fines in the U.S. and faced a number of lawsuits.
Before the scandal, Toyota had a reputation for high quality, centered around its super-lean production methods that empowered workers to hone in on quality control. Toyota has acknowledged repeatedly that it had tried to grow too fast.
There was no single massive change being pushed at Toyota under the new program, but rather a combination of efforts to guard against quality flaws while maintaining an edge in product appeal, such as cool-looking exterior designs and safety technology.
The plan that Kato kept calling "TNGA," short for Toyota New Global Architecture, is similar to solutions being pursued by other automakers, such as Japanese rival Nissan Motor Co. and Volkswagen AG of Germany, which are grappling with balancing quality and growth.
Toyota is facing the challenges of addressing the complexity of developing cars while costs were ballooning for new needs such as compliance and safety features, and consumers weren't willing to pay more, said Deutsche Securities senior analyst Kurt Sanger after hearing Kato's presentation.
"It's impressive in its aspirations and frankly the scale," he said of Toyota's plans.
In 2014, Toyota sold 10.23 million vehicles, beating out Volkswagen and General Motors Co.
In a demonstration at one of Toyota's plants, it showed a variety of technologies it had developed to grow ever leaner while making good cars, ranging from better synthetic leathers to shinier paint jobs.
Toyota said it had programmed robots to simulate the delicate hand movements of a craftsman to shape a car's body. It also created its own way of screwing with lasers that shortened the welding of each screw from 2 seconds to 0.3 seconds. It shortened the line for stamping a metal part from 65 feet to 6 feet by making the machines smaller.
Toyota said it will continue to focus on keeping costs down, while taking on new steps such as using existing plants and facilities to carry out the changes.
Production lines will be simplified and slimmed down, downsizing facilities such as painting booths, and switching to equipment that sits on the plant floor, rather than being suspended from above, as is standard today.
Among the other main measures:
- Improving basic vehicle parts such as platforms, which will become more sturdy and rigid for increased safety, as well as powertrains, such as gasoline engines, that will be in all vehicles.
- Boosting fuel efficiency through an aggressive push in hybrids, which switch back and forth between a gas engine and an electric motor, such as the Prius.
- Improving handling by lowering the center of gravity of vehicles.
- Enhancing safety features through sensors, radar and cameras that avoid and detect crashes.