Toyota: Production Changes Possible
Sept. 27, 2002
TOKYO CBS.MW reports that with its production and sales falling in Japan and rising overseas, Toyota Motor is mulling ways to improve its manufacturing efficiency worldwide, but a spokesman declined to comment specifically on local media reports that it would reduce domestic production lines for the first time in 10 years.
The Nihon Keizai business daily reported Friday that Toyota plans to halt a production line next year at its main Motomachi plant, about 160 miles west of Tokyo, and transfer the production of hybrid vehicles to other plants.
"As far as improving efficiency of our manufacturing structure, we're looking at various options," a Toyota spokesman said, but would not deny the report.
The world's third-largest carmaker has been shifting resources into overseas production as sales abroad continue to rise while demand in Japan stagnates.
In August, overseas production surged 14 percent to 171,934 vehicles, while fell 2.6 percent to 209,802 units, Toyota announced earlier this week. Sales in Japan fell 2.3 to 104,435 vehicles.
Toyota makes most of its so-called hybrid cars -- fuel-efficient eco-friendly vehicles run on gasoline and electric power -- at the Motomachi plant, where another assembly line puts out luxury sedans such as the Crown.
Prius hits sales bumps
The Prius, introduced at the end of 1997 as the world's first mass-produced hybrid sedan, reached a sales milestone of 100,000 units in August. Toyota claims it's now making a marginal profit on each Prius sold.
But in major markets other than North America -- where 35,128 Prius cars have been sold and Toyota is on pace to see sales increase a third year in a row -- the Prius is struggling.
In Europe, Toyota sold 2,320 of the hybrids last year but has only managed to sell 555 units in the eight months through August 2002.
The trend is more troubling in Japan. Prius sales peaked at 17,653 in 1998, the first full year on offer, but have gone downhill ever since. Last year, Toyota sold 11,003 of the sedans in Japan, but eight months into this year only 4,464 Prius cars have left the showrooms.
Paul Nolasco, a Toyota spokesman, said that new models in the Japanese market often spike in their first year, beating sales targets by as much as three times.
"There are more hybrid offerings in the market now," he added, "and in the non-hybrid market in the Prius class -- compact cars with 1.3- to 1.5-liter engines -- Toyota has introduced close to a dozen totally new vehicles."
That's a lot of competition from outside the company and from within for a car that is more expensive because of its cutting-edge technology -- and all the more challenging given Japan's sluggish economy. Nolasco concedes that Toyota's sales target for the Prius is 1,500 a month, but sales so far this year have averaged a bit less than 560 units a month.
For the fiscal year 2005-06, Toyota is aiming for total hybrid sales of 300,000 a year. The figure includes sales of the Estima minivan, the Coaster micro-bus and modified-hybrid version of the Crown sedan, in addition to the Prius and possible future models.
Friday, Toyota and its affiliate Hino Motors announced that their fuel cell hybrid commuter bus, which runs on gaseous hydrogen stored in high-pressure tanks and a secondary battery, is the first such vehicle to be certified by the government for use on Japanese public roads.
Field tests for the fuel-cell hybrid bus are scheduled "to begin shortly," Toyota said in a statement.
Toyota plans to start marketing, on a limited basis, a fuel-cell hybrid passenger car in Japan and the U.S. around the end of this year