Tokyo,
March 30, 1999-- 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.
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.
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.
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.
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.
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).
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.
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.)
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).
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).
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).
In order to support Toyota's
European manufacturing operations, Toyota Motor Europe Manufacturing (TMEM)
was formed in Brussels, Belgium, in October 1998.
In July 1998, TMC established
a design center in the Cote d'Azur, France (with the start of operations planned
for early 2000).
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.)
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.
1998 vehicle production in Taiwan
was about 73,000 units (1994 actual production was about 65,000 units).
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.
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.
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).
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.
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.
1998 vehicle production result
in Vietnam was about 2,000 units.
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.)
1998 vehicle production result
in New Zealand was about 4,000 units (1994 actual production was about 15,000
units).
TMC is also moving forward with
projects in the following regions, which were not included in the original plan:
In August 1998, Corolla production
began in Indaiatuba, Sao Paulo, Brazil, with a production capacity of 15,000
units/year.
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%).
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.
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.
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.
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.
Sales result of the Toyota Cavalier
were about 7,000 units. (The cumulative total for 1996 through 1998 was about
28,000 units.)
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.)
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.
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.
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.
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.
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.