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TOYOTA STREAMLINING JAPANESE OPERATION TO IMPROVE PROFITS


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TOYOTA STREAMLINING JAPANESE OPERATION TO IMPROVE PROFITS

By Drew Johnson

Toyota, the world’s largest automaker, has announced plans to streamline its Japanese operations in an attempt to lower its break-even point. Toyota’s Japanese operations have recently been hit hard by the strong value of the yen.

Toyota President Akio Toyoda made the announcement at a recent event in Japan. Although Toyota is looking to cut some of its Japanese production, Toyoda stated that the company intends to produce at least 3 million vehicles domestically each year.

However, Toyota is preparing its Japanese operations to be profitable at the 70 percent utilization mark. “We’re trying to be able to operate at 85 yen (to the dollar) and 70 percent capacity utilization,” Atsushi Niimi, executive vice president in charge of manufacturing, said.

Toyota is also working to improve its process in order to cut costs. Niimi revealed that improved processes could cut Toyota’s capital spending by as much as 40 percent, which would cap the automaker’s annual expenditure at $8.4 billion.

The improvements should also help stave off Volkswagen’s attempt to become the world’s largest automaker. “Depreciation-wise, Volkswagen’s engine (production) cost is probably about 30 percent cheaper than ours,” Niimi said. “But we think we can win by 20 percent with our new processes.”

Toyota, the world’s largest automaker, has announced plans to streamline its Japanese operations in an attempt to lower its break-even point. Toyota’s Japanese operations have recently been hit hard by the strong value of the yen.

Toyota President Akio Toyoda made the announcement at a recent event in Japan. Although Toyota is looking to cut some of its Japanese production, Toyoda stated that the company intends to produce at least 3 million vehicles domestically each year.

However, Toyota is preparing its Japanese operations to be profitable at the 70 percent utilization mark. “We’re trying to be able to operate at 85 yen (to the dollar) and 70 percent capacity utilization,” Atsushi Niimi, executive vice president in charge of manufacturing, said.

Toyota is also working to improve its process in order to cut costs. Niimi revealed that improved processes could cut Toyota’s capital spending by as much as 40 percent, which would cap the automaker’s annual expenditure at $8.4 billion.

The improvements should also help stave off Volkswagen’s attempt to become the world’s largest automaker. “Depreciation-wise, Volkswagen’s engine (production) cost is probably about 30 percent cheaper than ours,” Niimi said. “But we think we can win by 20 percent with our new processes.”

link:

http://www.leftlanenews.com/toyota-streamlining-japanese-operation-to-improve-profits.html

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