Toyota Announces Final Report on New Global Business Plan
30 March 1999
Toyota Announces Final Report on New Global Business Plan
TOKYO, March 30 -- Toyota Motor Corporation (TMC)
published a final report summarizing the progress made through
1998, the last year of the "New Global Business Plan." TMC first announced
the plan (applicable period: 1995 through 1998) in June 1995, which focused on
advancing localization and increasing imports, and has made numerous efforts
toward achieving these goals.
In the area of advancing localization, TMC increased overseas production
significantly by expanding the capacity of existing plants and aggressively
bringing new plants online. Especially in North America, in addition to
expanding existing plants such as Toyota Motor Manufacturing Kentucky, Inc.
(TMMK) (from 400,000 units/year to 500,000 units/year) and Toyota Motor
Manufacturing Canada Inc. (TMMC) (from 100,000 units/year to
200,000 units/year), new plants such as Toyota Motor Manufacturing, Indiana,
Inc. (TMMI) and Toyota Motor Manufacturing, West Virginia, Inc. (TMMWV) were
brought online, increasing annual production capacity from 900,000 units in
1994 to 1.2 million units in 1998 (total production capacity is expected to
increase to 1.25 million units/year in 2000). In Europe, Toyota Motor
Manufacturing France S.A.S. (TMMF) was established in France in November 1998.
It is scheduled to go into operation in 2001, with an annual production target
of 150,000 units of the Yaris, a strategic vehicle for the European market.
In Asia as well, where economic stagnation has been continuing, TMC
established a supply structure in anticipation of market recovery, starting up
second plants in Thailand, Indonesia, the Philippines, and Taiwan.
Next, in the area of increasing imports, TMC strengthened the sales
structure of the DUO stores, which sell VW/Audi cars, expanded imports of
completely built-up cars, and began selling the Avalon, a passenger car made
at TMMK, in May 1995 and the Toyota Cavalier, made by GM, in January 1996.
TMC also expanded its efforts to increase imports, including foreign
aftermarket parts, by establishing TACTI Corporation to procure and sell new
brands of aftermarket parts and by increasing the number of its directly owned
"jms" car shops to 28 by March 1999. Furthermore, TMC implemented various
steps to promote the "Toyota Global Optimum Purchasing System" and has made
steady progress, e.g., facilitating access for prospective overseas suppliers
by publishing the contents of its Supplier's Guide on the Internet (in
November 1997), and constructing a Suppliers Center (in April 1998) which can
be used for exhibiting new parts, etc.
Although the New Global Business Plan has come to a close, TMC plans to
continue expanding its business operations aggressively on a global scale in
the future.
Specific details of the major areas are as follows.
I. Advancing Localization
Since the New Global Business Plan was announced in 1995, TMC's
overseas production has been expanding on schedule, increasing from
1.22 million units/year in 1994 to 1.54 million units/year in 1998.
1. North America
TMC's North American production capacity increased to 1.2 million
units/year in 1998. In addition to expanding the existing plants,
two new plants (TMMI and TMMWV) were brought online on schedule.
In the year 2000, TMC's total North American production capacity
will increase to 1.25 million units/year with production starting
of a new SUV model at TMMI. TMC also plans to exceed the
originally announced localization plan by producing additional V6
engines (summer 1999) and starting production of automatic
transmissions for the Camry (spring 2001), both at TMMWV.
North American production results increased from about
740,000 units in 1994 to about 1.01 million units in 1998.
(a) 1998 production at TMMK was about 480,000 units (1994 results
were about 290,000 units). Expansion of production capacity
to 500,000 units/year has been achieved as outlined in the
plan.
(b) The line-off ceremony for the Tundra was held in December
1998 at TMMI. Mass-production started in February 1999 and
plans call for production of 100,000 units/year. Production
of a new Tundra-based SUV is planned to begin in the fall of
2000. Total production capacity will reach 150,000 units.
(c) Assembly of Corolla engines began in November 1998 at TMMWV,
with a planned initial production level of
300,000 units/year. Production of about 200,000 V6
engines/year will begin in summer 1999. As a result, annual
production capacity will reach 500,000 units in summer 1999.
Coupled with the above increases, Bodine Aluminum, Inc. plans
to expand its production of cast aluminum parts for V6
engines from the current level of 180,000 units/year to
380,000 units/year from early 2000. Beginning in the spring
of 2001, moreover, TMMWV will start producing automatic
transmissions for the Camry (at an annual production rate of
360,000 units).
(d) 1998 actual production at TMMC in Canada was about
170,000 units (1994 result was about 90,000 units).
Expansion of production capacity to 200,000 units/year was
achieved in 1997. Production of the new Solara model began
in June 1998.
(e) Total exports of vehicles from the U.S. amounted to
36,000 units. (The cumulative total for 1995 through 1998
was about 240,000 units.)
2. Europe
European production capacity expanded to 220,000 units by the end
of 1998. Toyota Motor Manufacturing (UK) Ltd. (TMUK)'s second
assembly plant started building Corolla lift-back models in
September 1998. Total European production capacity will reach
350-400,000 units in 2001, when the French plant goes into
production.
1998 vehicle production result at TMUK was about 170,000 units
(1994 result was about 90,000 units).
(a) 1998 engine production at TMUK was about 110,000 units
(1994 actual production was about 80,000 units). TMUK's
engine production capacity will increase from the current
level of 150,000 units/year to 200,000 units/year by the end
of 1999, and to between 350,000 and 400,000 units/year in
2001. A casting process will also be added to the engine
production process (with the start of production planned for
2000).
(b) The new production company, Toyota Motor Manufacturing France
S.A.S., established in Valenciennes, France, in October 1998
is proceeding with plant construction with the goal of
starting production by early 2001 (at the rate of 150,000
units/year).
(c) In order to support Toyota's European manufacturing
operations, Toyota Motor Europe Manufacturing (TMEM) was
formed in Brussels, Belgium, in October 1998.
(d) In July 1998, TMC established a design center in the Cote
d'Azur, France (with the start of operations planned for
early 2000).
(e) Exports of TMUK-produced cars to countries outside the EU,
which began in 1996, reached about 7,000 units in 1998. (The
cumulative total for 1996 through 1998 was about
18,000 units.) Exports of engines to Turkey reached about
8,000 units in 1998. (The cumulative total for 1996 through
1998 was 45,000 units.)
3. Asia and Oceania
Production capacity in Asia and Oceania expanded to 640,000 units
in 1998. Against the background of stagnating economies and a
shrinking automobile market in Asia, 1998 production result in
Asia and Oceania was about 280,000 units (1994 actual production
was about 410,000 units). To maintain local operations and
employment levels, TMC has been taking such measures as the
expansion of exports from local operations, support of training,
and active support of management of parts makers and dealers.
(a) 1998 vehicle production in Taiwan was about 73,000 units
(1994 actual production was about 65,000 units).
(b) 1998 vehicle production in the Philippines was about
11,000 units (1994 actual production was about 30,000 units).
Production of constant-velocity joints was about
57,000 units. In addition, transmission exports to Japan
began in March 1998.
(c) 1998 vehicle production in Thailand was about 35,000 units
(1994 actual production was about 110,000 units). Production
of engine blocks was about 100,000 units (1994 actual
production was about 53,000 units). In April 1998, the
export to South Africa began of Hilux production parts made
in Thailand. In July 1998, the export of Corolla bumpers to
Brazil began. In August 1998, the export of Hilux made in
Thailand to Australia began.
(d) 1998 vehicle production result in Indonesia was about
17,000 units (1994 actual production was about 80,000 units).
In February 1998, production began at P.T. Toyota-Astra
Motor's (TAM) second plant (Karawang Plant). 1998 engine
production at TAM was about 36,000 units (1994 actual
production was about 70,000 units).
(e) In China, Toyota continues to build our parts production
network. In June 1998, the line-off ceremony for a constant
velocity joint production joint venture was held. In July
1998, the line-off ceremony for a engine production joint
venture was held. In January 1999, the line-off ceremony for
a forged parts manufacturer was held. As for vehicle
production, in November 1998, a manufacturer of compact buses
was set up. TMC is also undertaking negotiations with the
Chinese government on a small car project. In addition TMC
has been providing support for increasing production capacity
to 150,000 units/year targeting sales of 100,000 units/year
for the Tianjin Charade. Finally, in February 1998 Toyota
Technical Center (China), Ltd. was established to provide
production and development support, with operations scheduled
to begin in April 1999.
(f) 1998 vehicle production result in Malaysia was about
6,000 units (1994 actual production was about 17,000 units).
1998 production result of power steering units at T & K
Autoparts Sdn. Bhd. was about 27,000 units. 1998 actual
production of lower ball joints was about 12,000 units.
(g) 1998 vehicle production result in Vietnam was about
2,000 units.
(h) 1998 vehicle production result in Australia was about
100,000 units (1994 actual production was about
78,000 units). 1998 exports of Australian-made Camrys
totaled about 30,000 units. (The cumulative total for 1996
through 1998 was about 70,000 units.)
(i) 1998 vehicle production result in New Zealand was about
4,000 units (1994 actual production was about 15,000 units).
4. Other regions
TMC is also moving forward with projects in the following regions,
which were not included in the original plan:
(a) In August 1998, Corolla production began in Indaiatuba, Sao
Paulo, Brazil, with a production capacity of
15,000 units/year.
(b) In India, TMC is preparing to start production of family type
diesel passenger vehicles exclusively designed for the Indian
market by the end of 1999. The plant building was completed
in February 1999.
As a result of the foregoing activities, the percentage of
worldwide sales (excluding Japan) accounted for by
overseas-produced vehicles reached 52% in 1998 (percentage in
1994 was 48%).
5. Parts related
(a) For major parts, such as engines and stamped parts, as well
as facilities and materials, TMC is making steady progress in
localization, with local procurement being the rule.
(b) In July 1996, TMC published the "Supplier's Guide" to foster
understanding by new suppliers of TMC's procurement
activities and sales approach procedures, as well as to help
current suppliers understand better TMC's procurement policy
and procedures. In November 1997, TMC published the contents
of its Supplier's Guide on the Internet to facilitate access
for prospective suppliers.
(c) The "Global Optimum Purchasing System" is already in
operation in North America and Europe, and preparations are
underway to establish the same system in Asia and Oceania.
The following three main pillars of this system are being
enhanced:
[1] New Supplier & New Technology Cultivation Program
To cultivate new suppliers, TMC has been holding new parts
exhibits, JAMA/CLEPA business talks (in November 1997),
JAMA/MEMA business talks (in November 1998), theme exhibits
such as "New manufacturing methods exhibition" and "World No.
1 activities exhibition," etc. TMC is aggressively promoting
new parts exhibits for global suppliers.
[2] Current Supplier Improvement Support Program
As part of this program, an expected value system is being
implemented in 11 countries worldwide. A system has been
established in each region to spell out the expected values
and to recognize those suppliers who meet them. In February
1999, a procurement policy explanation meeting was held in
Japan with global suppliers in attendance.
[3] International Price Comparison System
This system went into full operation in August 1995, and is
being promoted as a system for updating/adding price data and
for applying such data to new products.
II. Increasing Imports
1. Increase of TMC cars produced overseas, and foreign makers' cars
(a) Sales result of VW/Audi cars through DUO dealers were about
29,000 units. (The cumulative total for 1995 through 1998
was about 119,000 units.) At the end of 1998, the
nationwide sales network consisted of 144 sales outlets.
(b) Sales result of the Toyota Cavalier were about 7,000 units.
(The cumulative total for 1996 through 1998 was about
28,000 units.)
(c) Sales result of the Avalon made at TMMK were 4,000 units.
(The cumulative total for 1995 through 1998, including the
Scepter, was about 59,000 units.)
2. Purchasing and parts
(a) In April 1998, to further facilitate sales by suppliers, TMC
opened a Suppliers Center (in Toyota City, Aichi Prefecture)
that can be used for exhibiting new parts, etc.
(b) For the importation of originally equipped parts, TMC is
promoting: [1] New Supplier & New Technology Discovery
Program, [2] Current Supplier Improvement Support Program,
and [3] International Price Comparison System, etc., of the
"Global Optimum Purchasing System" which is based on fair
and objective evaluation, utilizing the same approach TMC is
using to promote local purchasing.
(c) In April 1996, TMC established TACTI Corporation to procure
and sell new brands of aftermarket parts. In November 1996,
TMC began the operation of its directly owned "jms" car
shops, and increased their number to 28 shops by the end of
March 1999. The locations include: Sapporo (3), Kushiro,
Hakodate, Hachinohe, Morioka, Sendai, Mito, Kooriyama,
Utsunomiya (2), Chiba, Tokyo, Kanagawa (2), Aichi (2), Gifu,
Kobe (2), Okayama, Takamatsu, Hiroshima (2), Fukuoka, Oita,
and Kumamoto.
(d) Cooperation with TACTI has significantly bolstered the
lineup of imported products handled by TMC parts
distributors. As part of a plan to increase the sales of
TACTI products, efforts to increase sales are continuing.
3. Activities to promote understanding
(a) TMC established an internal "contact point" in July 1995 to
deal with inquiries related to handling foreign cars, and
informed interested parties through visits and
announcements. So far, there have been contacts from
several foreign makers.