Toyota will further streamline and become more efficient by moving production to emerging markets and away from mature markets such as North America and Japan. Exchange rates are one of the problems faced by Toyota as it exports a bigger portion of the cars it produces in Japan compared to rivals Honda and Nissan. After its first loss in 70 years, Toyota rebounded to make a profit in the fiscal year ending March 2010, but it took a ¥320 billion kick from the yen’s rise against the dollar and euro.
Targets for production in North America will be higher “self-reliance from development to manufacturing” said Atsushi Niimi, Toyota’s global manufacturing boss. Toyota’s North American capacity is now lower by some 400,000 units from the closure of New United Motor Manufacturing Inc, the company’s joint assembly operation with GM in California. Production in Japan will be streamlined by combining lines and putting production of similar vehicles in the same plants. Also planned are lines that are able to produce both body-on-frame and unibody vehicles.
Toyota seems to have got back on its feet financially. With aggressive cost cutting and streamlining, the Japanese giant now needs to make an estimated 7 million units to turn a profit, from the previous 8 million. For instance, in the fiscal year ending March 2009, Toyota built 7.56 million units and made a lost, whereas this year they made 7.28 million and made a profit. Toyota’s aim to be a leaner outfit was evident in Thailand, with the suspension and migration of Hilux/Fortuner production.