People's expectations of cars are constantly changing. People are beginning to experience the pleasure of ownership in emerging countries—which are experiencing rapid economic growth—and everyone has high expectations for greater driving enjoyment and environmental performance. In an era of sudden and drastic change, we need the ability to see what is already apparent, as well as to foresee the next advancement. It is the customer who drives such change. By remaining firmly focused on customers and continuing to listen to them, we can adapt to change and make sustainable growth possible. Continuing to make "always better cars" that earn smiles from our customers is the only way forward to a successful future. Based on this conviction, Toyota will carry on working to meet the diverse needs of different customers and make "always better cars" that can satisfy customers. To enable us to continue meeting this goal, we are working to preserve and strengthen Japan's monozukuri (manufacturing) tradition.
In order to strengthen our research and development systems, we are expanding the role of our chief engineers (CE) as a way of clarifying their position as the development representatives closest to the consumer, thus speeding up the decision-making process. We have also strengthened our design systems by introducing a design process in which the CE plays the central role. In order to make better cars that match the needs of each region, we have strengthened regional R&D bases, posted regional general managers (North America and China, Japan and Europe, and emerging countries), and are coordinating operations with regional sales divisions and research and development bases.
TNGA represents an initiative to make better cars hereafter and a new framework for car manufacturing that will simultaneously realize a large increase in product appeal and cost reductions at an advanced level. It delivers improved performance in the basic performance of driving, turning, and stopping, and enables the standardizing of parts and major components across different models to reflect the preferences of local markets.
Through cooperation between the development and design divisions, newly developed car platforms will help to realize the development of cars with never-before- seen inspiring designs and superb handling. The TNGA initiative will commence with three front-wheel-drive platforms (accounting for approximately half the total unit production volume). To coincide with TNGA, Toyota will introduce "grouping development"—the simultaneous planning and development of multiple vehicle models—allowing the standardization of parts and major components across a greater number of car models and cost reductions in cooperation with suppliers. This approach means that development manpower and costs can be targeted at those development processes that relate to customer preferences and region-specific characteristics, thus achieving differentiation and realizing further improvements in product appeal.
In order to reflect our policy of "always better cars" in our production phase, we strive for "making better cars" and competitive monozukuri.
The automotive industry operates in diverse market environments. While market expansion in emerging nations has created a demand for cars of good quality at an affordable price adapted to regional needs, the limited markets of developed countries are the scene of fierce competition centered around environmentally friendly cars. Moreover, current issues in society ranging from the unprecedented strength of the yen to the crisis in electricity supply—produce very challenging conditions for monozukuri. Nevertheless, Toyota has a strong track record in monozukuri and as a result of technological innovations, the company has overcome a series of major environmental changes in the past, from the oil crises and stringent emissions standards to the bursting of the Japanese economic bubble.
Going forward, innovations must focus on the need to become a company capable of winning in a climate of global competition and delivering to customers quality products at more affordable prices. Toyota sees this challenging social environment as a major opportunity and aims to achieve groundbreaking cost reductions through monozukuri innovations originating in Japan. To reach this goal, we must rebuild our production system, for example by increasing our workplace strength, which is rooted in our knowledge of monozukuri and consummate technological skill; strengthening our technological innovation capabilities by integrating advances in production technology together with the creation of new methods and materials and product development; and by developing a three-region system to rebuild production systems based in the Tokai, Kyushu, and Tohoku regions.
This policy orientation means (1) One-by-one production, (2) Production at the optimum speed for sale, and (3) Small-scale production, all of which form the basic principles of the Toyota Production System and the concrete realization thereof.
In order to manufacture quality products at affordable prices, even in small quantities, we plan to increase the net efficiency rate and universality of our facilities, make possible gradual investment (investment starting at a low level and increasing in line with requirements), and promote the merging and discontinuance of processes as well as other improvements. We believe that this will in turn facilitate localization of production. The following four key phrases form the basis of achieving such technological innovation: "simple and slim," meaning equipment that is resistant to breakage, easy to repair, and involve reduced depreciation cost; "variable models in variable volume," meaning introducing small-scale general-purpose lines with simple set-up changeovers to new/different models; "net shaping," meaning a reduced number of processes and high levels of skill; and "high added value" through miniaturization, higher performance, higher design values, and reasonable prices. Applying this innovative technology will allow timely response to changes in production model or quantity, reducing lost opportunities, and also enable reductions in investment costs, thus strengthening our management systems.
Henceforth, Toyota will rapidly develop and mature innovative technologies that focus on Japan and roll them out globally in a timely manner. The basis of production is to manufacture where the market is. We will therefore implement localization of production. Nevertheless, the source of our competitiveness lies in Japan's strong production sites, advanced production technology, high added-value product manufacturing, and strong sales capacity. In order to maintain and enhance this competitiveness, we are maintaining production in Japan of three million cars and making effective use of this system. This is our approach.
Toyota has released the hybrid car Aqua for the compact car market—in which demand is the highest—based on the belief that the spread of environmentally-friendly cars will contribute to society. During the launch of the new Aqua, a live broadcast was made from the Iwate Plant in Tohoku where the Aqua is produced. The plant has been reinvigorated by the orders for 60,000 cars prior to the launch and production line operators appeared in the broadcast, speaking passionately about the Aqua. The Iwate Plant commenced production firmly believing that the launch of the Aqua would assist in the revitalization of Tohoku. A plan to make Tohoku into the third car manufacturing hub in Japan after Tokai and Kyushu has now begun.
Toyota has sold more than 4 million hybrid cars worldwide since 1997 when it released the world's first mass-produced hybrid car, Prius, which gained favor with many customers. Over the intervening years, Toyota has expanded its range of cars fitted with hybrid engines to include minivans, sedans, SUVs and wagons, broadening the scope of hybrids. In addition, responding to the increasing environmental awareness of customers in recent years and the demand for fuel-efficient cars, Toyota has developed the compact and affordably-priced car, Aqua.
Aqua is not simply a smaller version of the Prius. Instead, the concept behind Aqua is to present a revolutionary hybrid compact car designed for 2020. It is a lighter and more compact, fun and easy-to-drive car, boasting the best fuel efficiency at an affordable price. The car name is derived from the Latin word for water, evoking a clean and free-flowing image, to encourage more people to experience the joy of driving hybrids. It has the same hybrid system as the Prius —the Toyota Hybrid System II (THS II)—but most parts, such as the smaller motor, have been redesigned to make them lighter and more compact.
Also, ingenious features support driving to help the driver to better enjoy the capabilities of the hybrid car. These include features to support eco-friendly driving such as Eco Judge, which monitors the level of eco-driving in different driving situations and Eco Wallet, which displays the cost-saving achieved through greater fuel efficiency.
Production line for the Aqua
In July 2012, Kanto Auto Works, Ltd., which operated the Iwate Plant, Central Motor Co., Ltd., and Toyota Motor Tohoku Corporation were merged to form Toyota Motor East Japan, Inc.
The newly formed company will participate in manufacturing globally competitive compact cars, leveraging the innovative technological strengths of its three predecessors.
Tohoku's production sites, including the Iwate Plant, make use of the region's advantages—such as the local support, outstanding local personnel, and a wide variety of fundamental technologies—to reinforce their capability for compact car production.
Toyota Motor East Japan will provide the world's most attractive compact car that closely fits the needs of customers by creating streamlined and flexible manufacturing sites which handle the production of major components through to assembly, and by making improvements and reforms to car production through unified development, manufacturing technology and production. We believe that this will enable us to preserve Japanese monozukuri.
Toyota's quintessential compact car, the new Corolla launched in May 2012, is also produced in Tohoku, at the Miyagi Plant, boosting the local procurement rate to 40% and giving impetus to the car production industry in the region.
Aqua, the first hybrid car we have produced, is the shining star of Iwate for the revitalization of Tohoku. As "Team Iwate," we have replaced our inspection checklist with an evaluation from the customer's perspective and, by closely coordinating each process, we succeeded in the early launching of a high quality car. We will continue to aim for even higher quality, with a goal of one day seeing the Aqua sold everywhere as the highest quality car in the world.
Quality Control Div. Iwate Plant Toyota Motor East Japan, Inc.