Toyota to cut costs by standardising component designs

Toyota to cut costs by standardising component designsToyota is targeting to cut its capital spending on parts production by half within the next four years, and how it hopes to achieve this is by standardising its component designs, reports indicate.

For its new vehicles, the company is starting to design parts using a new method, which is called the Toyota New Global Architecture program. While body and interior designs will continue to reflect different characteristics for various global markets, the design of components hidden away are set to be standardised.

By doing so, Toyota is looking at universalising about half of a vehicle’s 4,000 to 5,000 various parts. Standardising components will also help streamline processing facilities, enabling a reduction in cost of capital spending and fixed operating expenses. Going that route will also bring down production costs for autoparts makers.

The reports add that the company already has a project in place that pares back parts costs by overhauling manufacturing processes and materials, but the new programme – which spans a range of vehicle models – will speed up cost savings. According to the company’s executive vice president Shinichi Sasaki, the benefits will begin to show up in one year and be full-blown in four.

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Anthony Lim

Anthony Lim believes that nothing is better than a good smoke and a car with character, with good handling aspects being top of the prize heap. Having spent more than a decade and a half with an English tabloid daily never being able to grasp the meaning of brevity or being succinct, he wags his tail furiously at the idea of waffling - in greater detail - about cars and all their intrinsic peculiarities here.

 

Comments

  • ss427 on Mar 02, 2012 at 2:03 pm

    OMG, does that mean we will see Avanza and Innova parts in the Lexus LS 460?! :( You better know what you’re doing Toyota, you’re already in serious state of sales and vehicle desirability decline. If you continue to cut cost, you will go the Nissan path of offering seriously ugly and poorly designed cars. :(

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    • Chilavert on Mar 02, 2012 at 2:58 pm

      read carefully. only hidden part.

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      • omanjedi on Mar 02, 2012 at 4:45 pm

        It will be less Engineering Design and thus majority of the models would have the same characteristics. I fear all Toyota will be lesser fun to drive in the future…

        BUT WAIT…..toyota is already producing boring cars….hahaha…

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    • VOLVO FOR LIFE on Mar 04, 2012 at 2:03 am

      really love the way how people complaint how toyota is cutting cost but they do not notice how much audi charges a premium over a vw which is actually superior technically to ana udi. to be honest i actually wish they used some of the cheaper parts in the JDM cars (rav4). getting parts for this car is a total pain.

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      • kadajawi on Mar 04, 2012 at 1:07 pm

        Hold on. VW superior technology to Audi? Where? They usually use the same tech, if anything the more premium features are reserved to Audi. Also the materials inside an Audi are a bit better, I’d argue the design is nicer too, and the Audis tend to get the more powerful engines. CVT is also only available to Audis IIRC. They do try to differentiate them, although I agree, why not just get a VW, they are somewhat similar (actually, why not just get a Skoda?).

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  • noComment on Mar 02, 2012 at 2:47 pm

    the best way for toyota to learn this is…go and learn this from PROTONG…they are the expert in making the car cheap but to sell high…huhuhu

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    • kadajawi on Mar 02, 2012 at 3:13 pm

      No need. Toyota is an expert themselves, more so than Proton. They are the master of charging too much for too little. Look at Avanza, Vios…

      Why for example is the Vios as expensive as the Fiesta, but by far not as well spec’ed? In Europe the Fiesta costs about as much or even more than the Yaris (Vios hatchback), but there the Fiesta has the same specs as here, and the Yaris has comparable specs to the Fiesta (especially in terms of safety).

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  • alldisc on Mar 02, 2012 at 2:48 pm

    this is what proton suppose to do.. other than platform sharing and powertrain,

    many other things like power window motor, or door locks/latches can be shared.

    this is one reason proton cannot achieve the economic scale.

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    • How do you know Proton doesnt share parts across model?

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      • alldisc on Mar 02, 2012 at 8:39 pm

        if proton did share parts, than their cars wouldn’t be more expensive than vios… whats keeping vios from selling cheaper is the 75% excise duty and among others.. 10% sales tax.

        so why is it proton cars cannot sell for a reasonably cheap and affordable price and still need protection?

        i see many common parts in wira, satria, wira aeroback and putra.

        i do not see the same between waja, gen2, neo and savvy.

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        • kadajawi on Mar 02, 2012 at 9:28 pm

          I thought Proton also has the same 75% excise duty.

          http://www.freemalaysiatoday.com/2012/01/18/protons-more-expensive-in-malaysia-than-overseas/

          According to this source even for a Proton or Perodua you’ll pay 65% excise duty and 10% sales tax (older sources (like 7, 8 years ago) say Proton were only subjected to 50% of the excise duty, however I could not find any source confirming that this is still the case).

          As far as I know cars produced in ASEAN countries are subjected to the same sale tax as local cars (which includes the Vios). CKD is an additional 10%, CBU 30 (or was it 35?).

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          • alldisc on Mar 04, 2012 at 2:11 pm

            the vios is surely cheaper in indonesia and thailand than a proton persona. if its not about the tax, what is it then.

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          • kadajawi on Mar 04, 2012 at 4:51 pm

            Profit. Any sane company will try to maximize profits. Toyota isn’t god, they are a company.

            My theory is that the government has said base spec must cost at least 70k, and then you can go up accordingly. Same with the Ford Fiesta, actually. But while Ford gives the Fiesta lots of specs, which they seem to be allowed to, Toyota has decided to make the car as empty as possible. People will still buy it.

            So basically it is a part of protectionism through the government and greedyness of Toyota. If the government doesn’t have any influence at all then Toyota just tries to earn as much as possible (again that is the sane thing to do). As long as people still think it is the tax that makes the cars so expensive Toyota can do that, as soon as they find out that Toyota is just ripping them off sympathies can change (as people like to bash Proton because they are protected). this behavior can of course backfire, so Toyota shouldn’t be too greedy.

            That the Persona costs more shouldn’t be a big surprise, it’s a (small) C segment car, while the Vios is B segment. Funny how people still buy the cheaper less well made car though (because it is more expensive). Just yesterday I have had people who drive a regular Japanese C segment car comment on how solid, strong and tough our Kangoo feels. A Kangoo, of all things, an affordable workhorse for young families and contractors, something that was never meant to be premium in any way.

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    • oligopoli on Mar 02, 2012 at 4:56 pm

      u sure dont know those thing u mention already being shared, do you?

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  • This is actually what China is doing. It is proven that Japan need to recalibrate their processes. From now on, Japan slowly rethink their way of doing things. The next question: how about our national car – as usual wait and see! Soon, China rule.

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    • sukasuki on Mar 02, 2012 at 7:31 pm

      i dont think china do engineered their own parts. all i can see is just mix and match. just like era jinbei, headlights copy from alphard, body toyota hiace, engine from isuzu.

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  • Redrules on Mar 02, 2012 at 2:59 pm

    I honestly that’s what Toyota has been doing all this while, sharing platforms betwwen different segments and the most telling signs is almost all of them lookalike.

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    • kadajawi on Mar 02, 2012 at 4:16 pm

      Not really. Why would a similar (not identical!) design be cheaper to manufacture? Using the same engine drives costs down, using a similar looking headlight won’t (if it is identical it would).

      The reason for that is to make the brand recognizable. It’s quite common with contis (look at all Renaults from a certain time. All Audis. VWs. Skodas. Seats. Citroens. Peugeots. Mercedes. BMWs. Lamborghinis. Rolls Royce. … Kia hired the head of Volkswagen group design for that purpose, and he did succeed IMHO.

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    • ss427 on Mar 02, 2012 at 4:48 pm

      Actually sharing platforms and the sharing of actual parts are 2 DIFFERENT matters altogether.

      Lots of manufacturers shared platforms among their own lineups to offset the initial huge capital investment in designing a totally new platform. There’s nothing wrong sharing chassis, drivetrain, suspension parts with a few vehicles from the same manufacturer.

      But its another thing when the said manufacturer started to use the same window switches, turn indicator stalks, a/c control panel etc among their vehicle lineup… and it will be a sin if they choose to put in crap, bargain basement parts into their luxury lineup just to have a bigger profit over there. :(

      Imagine using Avanza a/c control panel in the Camry? Unthinkable? But tech it is possible.

      We shall see how it turns out

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  • Chilavert on Mar 02, 2012 at 3:00 pm

    reduce the part cost and increase the OTR price. brilliant move by Toyota.

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  • kadajawi on Mar 02, 2012 at 3:06 pm

    Most of all VW is doing it (same platform for almost all front wheel drive cars… from the Polo to the Sharan!). GM is doing it with PSA. Ford is doing it. Even Porsche is working on such a project (sharing parts with Lambos etc.).

    And hey, cutting costs by sharing parts is better than cutting costs by producing Toyota badged milo tins (look at the C-NCAP scores for the Daihatsu Xenia (Toyota Avanza): http://www.c-ncap.org.cn/app/cncap/pzsj.jsp?pzid=2306 And that is C-NCAP, which is not harsh on the cars at all. Chinese cars perform better than that.)

    Sharing parts doesn’t mean that the switches must be cheap, they could also only be sharing internal parts hidden from the owner. The owner should be able to profit from it too, since spare parts are much less of a problem then (easier and cheaper to stock when the same part is used in all models than having to stock many different parts), mechanics should be more familiar with the cars, etc.

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  • Hyundai De la Junk on Mar 02, 2012 at 3:30 pm

    Lot of Sour Korean Grapes Here !

    The King/Emperor of Recycle Part is the Korean, launch Hyundai 2-3 year Recycle into KIA so life cycle of 1 car become 2.

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    • Loads of junk coming out of your text. Not even sure I understood.

      Sour Korean Grapes? Seems more like the sour grapes are on you.

      Don’t be jealous of what others have started first. The more important part is lowering the r&d cost of vehicles so everyone wins.

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  • Terminate79 on Mar 02, 2012 at 3:39 pm

    This was done by the Hyundai / Kia companies long time back. That’s why we could see the Hyundai logos in some of the interior parts in KIA’s.

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    • alldisc on Mar 02, 2012 at 8:42 pm

      hello friend.. Hyundai sudah makan Kia 10 years back laa.. when Kia almost bankrupt!

      dats why many similar models

      i30 = ceed
      sonata = optima
      tuscon = sportage

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  • They can cut cost as much as they like but by the time it reaches Malaysian shores, the politicians and their cronies will magically transform the modest Toyota into a above RM100,000 “luxury car”.

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    • kadajawi on Mar 02, 2012 at 3:57 pm

      Of course Toyota/UMW won’t see any of that money…

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    • bongek on Mar 02, 2012 at 4:01 pm

      which mean , this is a good new to cronies? not to toyota… :(

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      • kadajawi on Mar 02, 2012 at 4:25 pm

        Nonsense. Toyota has been selling overpriced cars all along. Why can a Ford be better value for money in Malaysia, while the same products but with similar specs, in Europe, are similarly priced? If it would be government and cronies, shouldn’t Ford be just as overpriced?

        What annoys me most of all is that Toyota decided to make more money by cutting costs by cutting down on safety. Compared to that shared parts are a huge improvement, that doesn’t cost people’s lives. Cutting down on safety features (and probably material quality too) does.

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        • fuelpump on Mar 02, 2012 at 7:25 pm

          For every 1.8 PRIUS sold, toyota malaysia make approximately RM40 000! profit .Yes RM40K for each car. This is not cekik darah, ini mmg sembelih punya toyota. Crazy. That is why they easily can give RM5-6K rebate, they still make RM34-35K profit. hehe.. at least toyota is “nicer”, hyundai/sime darby cekik RM56000 FOR EACH 2.0 SONATA!

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          • alldisc on Mar 04, 2012 at 2:09 pm

            that 40K is for them to give warranty, and a good network of after sales service centre while not forgetting parts back-up for the first 10 years.

            Ah Chong Workshop or Ah Keong Recond Car Sales not able to do that,

            even Mazda and Ford is not in the same level yet.

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          • kadajawi on Mar 04, 2012 at 4:25 pm

            That 40k is to make sure it won’t kill Vios etc. sale… imagine the Prius for 100k. Who would buy a B segment car when they can get a C segment hybrid for 100k? And those who care about and want a hybrid will probably be willing to pay 140k.

            Toyota is a company. As such it wants to earn money. As much as possible. Malaysia is great for them. They can charge as much as they want, and people are willing to pay.

            Parts for 10 years… not a big issue when the company hardly changes their cars over the years. Mercedes offers spare parts for cars that have been introduced 50 years ago and have been out of production for 40 years now (of course not everything is available anymore, and certainly it has to be imported from Germany).

            And 5 years warranty… in Germany Kia gives 7 years. Proton gave 6 years. And those are not expensive cars.

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  • omanjedi on Mar 02, 2012 at 4:47 pm

    ALL HAIL KOREAN CARS!!

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  • wochomi on Mar 02, 2012 at 4:51 pm

    … and is the hidden parts that makes the difference in quality.
    Oh no!

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    • kadajawi on Mar 02, 2012 at 6:14 pm

      Well, it’s not necessary that they will use the parts for their lowest end cars in all cars… perhaps they will use higher quality parts in their lower end cars too, since they got cheaper to produce as well? Ok, this is Toyota we are talking about…

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      • bongek on Mar 04, 2012 at 1:46 am

        waaa,,u give comment for every comment, u should be one of paultan writer …

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        • kadajawi on Mar 04, 2012 at 1:09 pm

          lol, I think their advertisers (especially Toyota) wouldn’t be happy about that.

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  • omanjedi on Mar 02, 2012 at 4:52 pm

    I propose to toyota to start producing cars based on interchangable components/modular concept. During Family gathering in Penang all family members can swap their doors/cushion/steering wheel/radiator in an instant. It good to see future Vios with different colour between chasis body/doors/bumpers..

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    • kadajawi on Mar 02, 2012 at 6:17 pm

      https://www.google.com/search?tbm=isch&hl=de&source=hp&biw=1229&bih=628&q=vw+harlekin

      (Yup, for a while you could order the Harlekin special edition for several VW models…)

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    • You can do it with smart cars…

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  • seancorr on Mar 02, 2012 at 6:55 pm

    Next we will see Honda launching their multi platform chassis too. I guess its the way to go to bring down the prices of cars as raw material prices are climbing over the years. We saw VW and Nissan and now Toyota announcing this.

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  • SAGA BeLum Masak on Mar 02, 2012 at 7:08 pm

    They have been doing it for the past 50 years. Only now they boast it out loud. Look at KE10,KE11, KE15, KE20, KE30, KE35, KE70, even their Unser is using the same K type engine and parts…

    Why only now they said it Again…..??

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    • kadajawi on Mar 02, 2012 at 10:10 pm

      Because I think they want to go further than to just share engines. Honestly as long as what I as owner get to see, touch, use is good enough and appropriate for a car of it’s class/price, I’m fine with it.

      For example what if the aircon controls are all the same, except for the knobs and faceplate (using better materials and different designs)? That could be ok, I guess (though I certainly wouldn’t mind rearranged controls). Just look at the RCD and RNS systems in VWs (music and also navigation in the latter), also used in Skodas and I guess other VW brands too. The design may vary a bit, but the functionality is the same. Development costs are lower, production costs too (only replace the face plate…).

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  • Jolly_idiot on Mar 02, 2012 at 7:55 pm

    Please promise no shits after cut cost!

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  • Pronessss on Mar 02, 2012 at 10:04 pm

    WHEN RECALL, 50% OF TOYOTA SAMA SAMA RECALL HAHAHAHAHA

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  • all along toyota already cut cost…now only they are admitting it.
    all their models are seriously overpriced. look at a vios dugong trd….priced at nearly a 100k for such a basic 3rd world entry level car about the same as a saga.

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  • PetroLeg on Mar 03, 2012 at 12:03 am

    Can’t believe it, cut cost means still can sell higher price for empty spec cars and gain more on profit margin so they can fuel all those top management decision makers that doesn’t know what the market is about and where the affordability really is, and older generation still worship this brand. Probably they should ask themselves why generation x onwards are moving towards cars with specs and bang for your buck!

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  • autojohndoe on Mar 04, 2012 at 12:50 pm

    My interpretation on the title is :

    By standardising component design, Toyota is increasing profit margin.

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  • Jack Leong on Mar 04, 2012 at 1:30 pm

    CUT COST??? this means that toyota no longer wants to make something new already, because it’s costly to test something new and unproven. there goes the spirit of innovation (kaikaku), i bet that their spirit of kaizen also “nyawa-nyawa ikan” already. well, that is THE toyota production model after all, cut cost, cut wastage, even cut the spirit of workers within ;)

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    • kadajawi on Mar 04, 2012 at 4:55 pm

      I’m not a Toyota fan, as one who is reading my posts will surely notice. But I don’t think that is the case. It makes much more sense to innovate and test when you use the same component in all the models. The development costs will be spread to all cars they sell, not just one model that may sell a few hundred thousand units.

      Seriously, all manufacturers are doing this, or will be doing this, those that are not big enough team up with others. Even Porsche is doing it. There is nothing wrong with it.

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  • Director on Mar 04, 2012 at 10:03 pm

    They’ve been doing this all along so what else they want to standardize? They not only standardize within toyota but also within sister company (daihatsu, perodua).

    Check; power window motor in Altis is interchangeable to Perodua Kancil (except the driver’s door- anti jam, only due to different socket). Still they charge RM4xx for Altis window motor while only RM80 for Kancil (by Perodua).

    Do they want to standardize the headlamps as well?

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