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Contributing to Society by Making Cars - Toyota Contributes to Growth of India's Economy and Society Through Etios

Etios - Tangible Evidence of Contribution to Society Through Making Cars

Contributing to society through making cars is Toyota's guiding principle. Automobiles not only help people achieve freedom of movement; by contributing to industrialization and human resource development, they also make a tremendous impact on societies and economies throughout the regions and countries of the world. Today, Toyota sees its mission as providing sustainable cars at affordable prices to consumers in China, India and other emerging economies, while doing our utmost to protect the environment and offer safe cars that our customers can drive with confidence. The Etios launch recently announced in India is a specific example of how Toyota fulfills its mission as cars like the Etios benefit suppliers, dealers and employees and help them grow. This is a car that will contribute to the growth of both the economy and society of India.

Contributing to Society through Making Cars

The Etios is announced at the Delhi Auto Expo

The Toyota principle is as simple as this: Contribute to society by making products that are useful to society. Years ago Toyota grasped the future of motorization and how it would contribute to and change society, so we invested in the manufacturing of automobiles. Since then, we have lived and breathed our principles in making cars.

In Japan's recent history, as motorization grew exponentially, a great many people took advantage of the convenience of automobiles, enjoying the freedom to go where they wanted, when they wanted, in complete comfort.

At the same time, Toyota cannot deny that motorization brought pressing issues like increased traffic accidents and negative impact on the environment. In the process, the public became more concerned about the environment and began to focus on sustainable mobility.

Toyota has always sought to contribute to society through the monozukuri philosophy - an all-encompassing approach to manufacturing. In its application of monozukuri to the production of automobiles, Toyota has pursued a sustainable method of making its cars ever more safe, environmentally friendly, reliable and comfortable. From this perspective, one of the most urgent tasks is how to address increasing automobile use in emerging countries. India, whose economy has enjoyed phenomenal growth in recent years, is one of the best examples of an emerging country and is especially noteworthy for the tremendous growth of its middle class. In 2005, only 8% of Indian household income was between 200,000 and 1 million rupees (400,000-2 million JPY/4,500-22,500 USD). In 2009, that percentage had risen to 13%. Academics say that when household income reaches about $5,000 a year, motorization begins to expand, so automobile sales in India are expected to rise 70% to about 2.5 million units in 2010. Contributing to society through making the right cars in such a rapidly growing emerging economy is one example of Toyota's principles.

Challenges in Making Sustainable Cars for Emerging Countries

Indian Auto Market Share Trends by Segment

Indian Auto Market Share Trends by Segment

In January 2010, at the Delhi Auto Expo in New Delhi, India, Toyota upstaged the world with its new Etios concept car.

In recent years, the automotive market's B segment* has shown rapid growth, particularly in emerging markets. India is no exception, and demand for a convenient automobile at an affordable price has grown significantly. During development of the Etios, Chief Engineer Yoshinori Noritake visited India many times to see the conditions, for himself. He observed some places with summer heat in excess of 50°C and others with winter temperatures far below freezing. Throughout the broad range of climate zones, he also saw narrow streets, perennially crowded conditions, rough road surfaces, and the scarcity of parking space. His experience with the operating environment made him realize the indispensability of a B-segment car with excellent basic performance characteristics. So Toyota‘s key objective became a combination of excellent engineering, design and features that are true to the basics. For the engineering part of the equation, Toyota had to maintain and expand upon traditional Toyota quality, durability and reliability (QDR) while providing an end product at a price that was affordable across a broad segment of the market.

The new engine had to have excellent features and simple construction. From the outset, all materials and components were sourced locally wherever possible, and production and engineering were aligned with local production technology and capabilities. As a result, Toyota achieved excellent reliability, superior maintainability and significant reductions in overall running costs. Simple design and construction kept the engine weight to a minimum, which resulted in much lower overall vehicle weight, and contributed to the exceptional fuel efficiency. In addition, the Etios meets EURO 4 exhaust emission standards, and is produced in a local eco-factory. At the transport and distribution stage, new packing systems add to transport efficiency, reduce exhaust emissions and incur a much lower impact on the environment. In India, more people tend to ride in one vehicle, so special attention was paid to interior appointments like the headliner and door trim, and the suspension was moved outside the cabin to create a very space-efficient interior and luggage area. Toyota focused on both active and passive safety measures that surpass competitors so customers could use the car with a complete sense of confidence. Thus was born the Etios, a car with polished performance and ample features, but with nothing superfluous. This strategy helped to hold costs down while offering an excellent balance of performance and quality.

How Emerging Countries will Benefit Economically and Socially from Etios Market Expansion

TKM staff inspects Etios components
TKM staff inspects Etios components

The automotive industry is a far-reaching one. Many people are involved in the production and sales of cars, ranging from suppliers to employees of Toyota Kirloskar Motor (TKM), dealers and logistics companies. Such an undertaking can have a significant effect on both the society and the economy. It's a real-world example of how Toyota contributes to society through monozukuri, the making of cars. Along with the launch preparation of the Etios in India, Toyota also had to find local suppliers, organize a dealer network, put together a servicing system, and much more.

Toyota set standards for quality, delivery dates, prices and management policies, and engaged about 82 supplier companies, including new suppliers. Of those, some 20 companies will establish new operations in or near Bangalore. Currently, our suppliers are working with Toyota hand in hand for the smooth launch. For the TKM employees, production of the Etios and experience came as a package, and now it has some of the first graduates of the Toyota Technical Training Institute (TTTI) working for TKM. A second plant was constructed for Etios production, which creates additional jobs for another 2,000 people. In addition, in the development area, TKM conducted on-site optimum product planning and design assessment from the start of the operation. There are currently 100 Toyota dealers in 69 cities across India, but by the end of 2010 TKM plans to have 150 dealers in operation. The criteria in selecting the dealer network are a sound management base and Customer First principles, based on Toyota's 3S (Sales, Service, Spare parts) dealer standards. Toyota is committed to working with TKM to continually increase customer satisfaction.

In July 2010, Toyota announced the start of Etios engine and transmission production at Toyota Kirloskar Auto Parts (TKAP), a unit production company in India. TKAP will produce about 100,000 engines and 240,000 transmissions starting in early 2013. Toyota expects to invest some 9 billion yen in the company, which will employ another 500 people. With this move, Toyota positions a key production center for core parts in India.

The socioeconomic benefits of the Etios go far beyond the job creation and economic activity. They also include human resource development and the building of an industrial base from the point of our contribution to the local economy. Although the Etios was unveiled in India, the same model will be produced and marketed in other emerging economies such as Brazil. Toyota believes that promotion of the Etios and expanding into new markets will lead to more social contributions in regions all over the world.

Column: July Sees First Graduates of Toyota Technical Training Institute

One of the first graduates

In the city of Bangalore on the Deccan Plateau in southern India, TKM established TTTI, an Indian version of the Toyota Production Technical Skills Academy in 2007. Based on the concept that making cars means human resource development, the company set out to train the best candidates in production and quality improvement on-site, and to offer educational opportunities to people who could not afford traditional educational methods. The institute offers a three-year course with scholarships that cover tuition and living expenses. It is open to anyone in the region who has graduated from middle school, and each year the number of applicants exceeds the number of openings by a factor of 10 (15 for FY2010).

In addition to specialist technologies, students also learn painting, welding, automobile assembly and maintenance servicing and specialty technologies such as mechatronics. Not only do the students gain technical knowledge and skills, they also learn the Toyota Way and the Toyota method of doing things as they receive their practical hands-on experience at TKM. In July 2010, the Toyota Production Technical Skills Academy sent its first 63 graduates out into the world. One graduate said," To me, a person who was unable to continue in school, the things I learned here are very important. Of course, I learned many things about making cars. I also gained many colleagues and was able to grow immensely as a human being."

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