Smarter and More Effi Cient

Toyota divides the vehicles it makes into four zones: exciting, high performance vehicles; appealing yet practical
vehicles; commercial and heavy-duty vehicles; and next-generation vehicles. In our pursuit of ever-better cars, we listen to our customers to understand their expectations regarding design, driving performance, ride, and equipment in each of these zones. Just as a road determines the cars that will be driven on it, collaboration between the members of marketing and R&D teams around the world, as well as staff from Japan, enables us to make cars that delight customers the world over. Toyotas design and R&D bases in nine locations outside Japan are key components of its globalized and localized operations, which integrate development, engineering, manufacturing, sales, and services. The Toyota New Global Architecture (TNGA) is our framework for making ever-better cars for a wide variety of customers and regions in smarter and more effi cient ways, with the ultimate aim of creating products that stir our customers emotions. Smarter and more effi cient In line with TNGA, Toyota aims to make ever-better cars more effi ciently by simultaneously cutting basic costs and substantially improving product appealwhich at fi rst glance may seem to be contradictory goals. Toyota applies a distinct planning and development process with each car model, fi rst fi nalizing the projected toward optimizing processes in each regionfor example, matching interior cabins, exterior designs, and driving performance to the preferences of our customers. By grouping and unifying optimal driving positions and hip-point heights, we are able to share common cockpit modules and parts across different car models and platforms. This, in turn, allows us to cut both the number of part variations and engineering man-hours. Under TNGA, Toyota is increasing standardization while enhancing basic performance and product appeal above and beyond customer expectations. We expect TNGA to result in lower basic costs and contribute to enhanced profi tability. Toyota plans to start unveiling new car models developed under TNGA from 2015. medium- to long-term product lineup and release schedule, then grouping models within the lineup. Toyota intends to raise the competitiveness of basic parts relating to ride, turning, and braking to world-class levels, and it is now able to standardize parts and units across different models through grouped development that puts multiple models through the planning process at the same time. For example, we have separately standardized the parts and units for compact, midsized, and large platforms (chassis) respectively. Based on the new vehicle architecture, we aim for full optimization by standardizing even more basic parts, including platforms and powertrains, across vehicle segments. So far, Toyota has developed three front-wheel-drive platforms and plans to develop several car models based
on each of these platforms. This streamlining has resulted in extra R&D capacity, which we are directing In Japan, for example, because of its long history in the country, Toyota has a robust manufacturing foundation replete with advanced technologies, manufacturing expertise, talented human resources, and a multilayered supply network. It is this foundation that has supported Toyotas global ambitions. Japan is and always will be central to the Companys ability to make competitive cars and create innovative manufacturing technologies. To be truly competitive, we think it is crucial to further increase Japans competitiveness as a global base. Toyota has been producing three million cars annually in Japan for more than 30 years, and this production structure has laid the foundation of the manufacturing competitiveness of the Toyota Group, including its network of suppliers. Continuing to concentrate investments in growth areas With further growth in sales volume likely, Toyota is working hard to improve productivity. We are placing top priority on maximizing capacity utilization and making effective use of our existing plants and manufacturing facilities from a global perspective. Over the next three years we plan to concentrate on modernizing existing facilities rather than building new plants (excluding those for which construction is already planned or in progress). We will continue to make capital investments that are necessary to sustain growth, and will focus on investing more effi ciently. Toyota has made signifi cant progress toward its goal of reducing the basic unit of capital invested in model redesigns by 40% compared to the levels seen before the global fi nancial crisis. While keeping total investment at an optimal level, Toyota will continue its policy of concentrating investment in regions that are expected to growparticularly in emerging markets, where we will step up investments substantially. Competitiveness cannot be created overnight, nor should it be regarded as a measurement derived from short-term profi ts and costs, which fl uctuate depending on prevailing business conditions. Competitiveness is a multifaceted challenge that cannot be measured with data or numbers; it is the sum of countless factors, such as a companys ability to nurture human resources, a corporate culture that pursues greater productivity through better quality and shorter lead times, the ability to innovate, and marketing skills, including after-sales services. The current degree of our competitiveness varies by country and region. Looking at the situation from both the medium- and long-term perspectives, Toyota is poised to refi ne and improve its competitiveness. We have put in place groupwide systems that will enable us to continue making ever-better cars that are profi table and excel in quality.
Our R&D bases allow us to make ever-better cars that are competitive in each region. They develop car bodies and parts in line with local needs, optimize powertrains to comply with local regulations, and expand the local procurement of parts in cooperation with local suppliers. As a core base in the Asia/Oceania region, Toyota Motor Asia Pacifi c Engineering and Manufacturing Co., Ltd. (TMAP-EM) collaborates with nearby R&D bases to develop cars specifi cally for emerging markets. To put the fi nishing touches on its local development structure, TMAP-EM plans to add to its team of roughly 600 employees to bolster its product planning, testing, and prototyping capabilities. Toyota Motor Engineering & Manufacturing (China) Co., Ltd. (TMEC), located in Changshu City, Jiangsu Province, conducts research and development in collaboration with the R&D centers of two joint ventures engaged primarily in the development of car bodies. To develop cutting-edge fundamental technologies, TMEC oversees the development of engines for cars produced in China, tests and conducts performance evaluations on a large-scale test course, and develops environmental technologies. Since the widespread use of eco-cars benefi ts the environment, TMEC is working toward the production of eco-cars in China. At the Beijing International Automotive Exhibition in April 2013, TMEC showcased its accomplishments by exhibiting the Yundong Shuangqing II concept car, which features hybrid components that are currently in development.
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Smarter and More Effi Cient

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Toyota divides the vehicles it makes into four zones: exciting, high performance vehicles; appealing yet practical

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