Toyota announced today that the first product based on a new platform strategy will launch later this year.

The yet-unnamed mid-size front-wheel drive vehicle will be the first to use the Toyota New Global Architecture (TNGA), a new, modular approach to vehicle platforms akin to Volkswagen Group’s modular platform strategy that the company says will help it cut the resources it needs by “20 percent or more.” Following the first vehicle, the company will roll out specific new platforms for both front-wheel drive compact and large vehicles as well as rear-wheel drive products.

This year Toyota anticipates that it will be able to reduce the capital investment required to introduce a new vehicle to its production lines by 50 percent compared to what it would have cost in 2008 when the auto industry went into decline.

By 2020, approximately half of Toyota’s global product portfolio is scheduled to shift onto the new platforms.

The company also reiterated its commitment to hybrid powertrains today, saying it anticipates a 15 percent improvement in its hybrid systems by re-thinking its drive unit layout and shrinking their components.

Along with new hybrid parts, the company says it plants to work in concert with suppliers to create powertrain components with its new modular vehicle platforms in mind that will reduce vehicle weight and offer a lower center of gravity.

As the world’s largest automaker, this is a critical milestone for Toyota’s continued success in the foreseeable future. Last year the company reported selling 10.23 million vehicles worldwide ahead of Volkswagen at 10.14 million units and General Motors with 9.92 million. Volkswagen is scrambling to design products that will appeal to drivers in the U.S. where it is struggling to compete while investing heavily in manufacturing operations here.

Meanwhile, Toyota has been able to reap the benefits of a weak yen combined with massive sales that will allow the company to funnel more money into developing products in its increasingly efficient strategy.

Toyota has increased the overall fuel efficiency of its powertrains by about 25 per cent and overall power output by more than 15 per cent, gains achieved by improving the thermal efficiency of its engines and the energy-relay efficiency of transmissions.

Its hybrid systems are also being improved: Toyota is targeting a 15 per cent rise in fuel efficiency thanks to a re-think of the drive unit layout and the design of smaller electric motors, inverters and batteries.

Toyota will begin to introduce its new powertrains this year, while continuing to work on innovative hybrid systems, transmissions and engines.

By rethinking the body structure, Toyota plans first to increase overall body rigidity by as much as 30 to 65 per cent, then to make further gains by using laser welding to join body components.

It will begin to roll out its new platforms with the launch of a mid-size front-wheel drive model this year, followed by specific new platforms for compact and large FWD vehicles and for rear-wheel drive cars.

This year Toyota is aiming to cut the amount of capital investment needed to ready a production line for a new model by about half, compared to 2008 levels.

Toyota is approaching the point where it can expect to reduce the investment needed for a new plant by approximately 40 per cent, compared to 2008 levels.

Toyota targets big savings in factory, product-development spending
Company eyes 20% drop in resources used to churn out new vehicles

Hans Greimel
Automotive News
March 26, 2015 - 12:30 am ET -- UPDATED: 3/26/15 6:37 am ET - adds link to statement

TOYOTA CITY, Japan -- Toyota Motor Corp. outlined massive new savings in factory investment and vehicle development, along with fuel efficiency gains, it aims to achieve through an aggressive companywide restructuring being launched this year.

The overhaul, part of a switch to new modularized product platforms, has been years in the making and is designed to fuel the automaker’s expansion beyond 10 million units in global sales annually.

By grouping bigger families of vehicles for production and development, the world’s largest automaker is targeting a 20 percent reduction in the resources needed to churn out new vehicles.

And by using more common parts that require less complex manufacturing configurations, the company aims to slash in half the amount of capital investment needed to prepare a new production line, compared with levels in 2008 before the financial crisis.

The changes will cut the amount of investment to build a new plant by 40 percent, the company announced today in Japan.

New engines

A new generation of engines will be up to 25 percent more fuel efficient than those in today’s Toyota vehicles while generating 15 percent more power, the company added. The company’s next-generation hybrid drivetrain, to debut on the redesigned Prius as early as year-end, will deliver a 15 percent boost in fuel economy.

Toyota President Akio Toyoda is banking on the overhaul in r&d strategy to kick the company his grandfather founded into growth mode after taking a pause on new production expansion.

“This is a period to rework our development and production sites,” said Mitsuhisa Kato, Toyota’s executive vice president in charge of r&d. “We will make a comprehensive new start.”

Toyota executives are counting on the changes in product development to deliver stable growth in an era in which rivals such as Volkswagen AG and Nissan Motor Corp. are rolling out their own modular-based product plans.

Kato, in an update on the plans, said the first cars based on the Toyota New Global Architecture, or TNGA, will be C-segment, front-wheel-drive models debuting later this year. The family of cars includes the Prius hybrid, Corolla and Lexus CT.

New platform

He declined to identify the exact nameplates, but the Prius is expected to be the lead-off vehicle for the new platform.

Toyota’s new TNGA approach focuses on the simultaneous development of multiple models and a heavy reliance on common modular components.

The shift in the company's approach to product development represents the biggest operating change of Toyoda's tenure, which so far has been hobbled by the global 2008-09 financial crisis, a string of worldwide recalls, the 2011 earthquake in Japan and the yen's soaring exchange rate.

Toyota unveiled the product-development strategy in broad terms in 2012 and has since provided periodic updates and details.

The approach will be applied first to three front-wheel-drive vehicle platforms that account for about half of the company's global production volume. Roughly half of the company’s vehicle lineup will be converted under the new strategy by 2020, Kato said.

Streamlined costs

The goal is to cut costs and improve the appeal of Toyota and Lexus vehicles through streamlined engineering.

Kato said savings in time and money will be plowed back into new technologies, better manufacturing processes, slicker designs and more attention to detail and quality.

“The aim is not just cost reduction,” Kato said. “It is making better cars.”

In a major change, Toyota also will use more components designed, engineered and manufactured to global standards instead of proprietary Toyota specifications.

This should aid worldwide procurement from big global suppliers and reduce costs, Kato said.

The company eventually aims to reduce the variety of parts across multiple nameplates by as much as 75 percent, he added.

Leaner manufacturing practices will help deliver some of the efficiency gains targeted.

Toyota’s will switch to “simple and slim” production lines that utilize downsized paint booths and more compact equipment that can be installed on top of the floors. Today’s factories, company executives say, often require large equipment that must be suspended from the ceiling or fixed to the plant floor.

Kato said the manufacturing upgrades will require new investments, but he declined to put a dollar figure on it.

But Toyota said that the new wave of investments will be, on average, lower than similar capital outlays made in 2008.

Risks and rewards

Global standardization of parts and platforms, however, can also create huge headaches when things go wrong.

No company is more aware of this than Toyota, which has been rocked by multiple large-scale recalls in recent years.

But Toyota says that simplifying parts and vehicle design and using fewer variations means more resources can go into developing better designs with less chance of defects.

Toyota’s global vehicle lineup has inflated to some 100 model platforms and 800 engine types, resulting in unnecessary complexity, Kato noted.

“Such increases,” he said, “have made it difficult to make each individual model ever better.”

In a demonstration at one of Toyota's plants, it showed a variety of technologies it had developed to grow ever leaner while making good cars, ranging from better synthetic leathers to shinier paint jobs.

Toyota said it had programmed robots to simulate the delicate hand movements of a craftsman to shape a car's body. It also created its own way of screwing with lasers that shortened the welding of each screw from 2 seconds to 0.3 seconds. It shortened the line for stamping a metal part from 65 feet to 6 feet by making the machines smaller.

Toyota said it will continue to focus on keeping costs down, while taking on new steps such as using existing plants and facilities to carry out the changes.

Production lines will be simplified and slimmed down, downsizing facilities such as painting booths, and switching to equipment that sits on the plant floor, rather than being suspended from above, as is standard today.