Toyota Motor Corp, the world's top-selling automaker, outlines new growth architecture that will focus on product development and manufacturing schemes that the company hopes results in creating more quality products and reducing development costs simultaneously. The company plans to shift half of its vehicles into new cost-saving platforms, giving them huge potential to expand beyond 10 million units in worldwide sales each year.
The initiative, otherwise known as Toyota New Global Architecture (TNGA), aims to achieve a 20 percent reduction in resources needed in manufacturing new vehicles. One way to do this is by standardizing vehicle engineering such as the optimal "hip-point" seating position found in a number of vehicles, including sedans, sports cars, SUVs and trucks. Through this method, there will be less variations needed in air-bags. It will also allow one-side installation of air-bag modules during assembly instead of the usual two sides.
"The aim is not just cost reduction," said Mitsuhisa Kato, Toyota's executive vice president in charge of R and D. "It is making better cars."
The new TNGA highlights the simultaneous development of multiple models and a strong reliance on common modular components. Its main measures include: enhancing the vehicle's safety features through the use of cameras, radars and sensors that detect and avoid crashes; lowering the vehicles' center of gravity to enhance handling; increasing the company's push in hybrids in order to boost fuel efficiency; and improving the basic vehicle parts.
The massive overhaul aims to generate savings that would at least make up one-fifth of the company's development costs. The earned savings would likewise be used to tailor other high-tech components such as auto-braking, which would be applicable to various markets.
"TNGA is not just a more cost-effective way of designing the automobile to play catch-up with Volkswagen and other," said a senior executive of Toyota. "It changes fundamentally the way we design and procure technologies and manufacture final finished products using those technologies."
The TNGA initiative will allow Toyota to spend half the required investment to retool factories that would create new models and slash investment on new factories by around 40 percent.
TNGA will also create notable changes for the company's group suppliers. Under the initiative, Toyota will begin using global standards for certain parts, eventually helping the company to weed out weaker suppliers and offer more business opportunities for others.
"Toyota needs to boost its product appeal, and quickly, to avoid losing market share," said Satomi Hamada, senior analyst at IHS Automotive.
