Toyota Targets Massive Savings in Products, Production

Toyota Motor Corp. is deploying a far-reaching strategy to cut product development costs 20% and slash capital investment for new plants by 40%.

The company began formulating the system four years ago under its Global Vision initiative. Underpinning the plan is the Toyota New Global Architecture, an array of shared platforms and powertrain components. The company says it will use TNGA to further lower product development expenses by co-developing multiple vehicle programs.

TNGA's emphasis on shared architectures and components will shrink the company's plant tooling and component costs and make its facilities more flexible. At the same time, Toyota is shifting to what it calls "simple and slim" production lines marked by lighter and more compact manufacturing equipment that can sit on the plant floor rather than be anchored to it or suspended from above.

The new manufacturing approach will lower initial plant investment costs 40% this year compared to 2008 levels, according to Toyota. The company estimates the capital investment to retool a production line for a new model is now half what it was seven years ago.

The first of the TNGA platforms will debut later this year in the redesigned Corolla small car and Prius hybrid. Two more front-drive chassis will be added in the next few years. By 2020, the three platforms are expected to carry about half the company's annual global output.