SALON

Thursday, Jun 21, 2012 5:00 AM UTC

Toyota stays lean to ride out strong yen and grow

By

Topics: From the Wires,

TOKYO (AP) — Toyota Motor Corp. has been hammered by the strong yen, putting extra pressure on the automaker to stay lean and come up with new innovations, but it is determined to ride out the challenge, a senior executive said Thursday.

Toyota Executive Vice President Atsushi Niimi acknowledged competition was growing extremely tough with South Korean makers, including Hyundai Motor Co., which have the advantage of a weaker currency.

A strong yen the value of overseas earnings for Japanese automakers, making it harder to offer products at cheaper prices abroad. The dollar has traded at 79-yen levels recently, down from about 100 yen in 2009.

Niimi said cost cuts, innovations and worker training will allow Toyota to export lean production to new markets, where Toyota can still grow.

“We can win against ‘yendaka,’ and we must win,” Niimi told a packed hall at a manufacturing conference, using the phrase for “rising yen,”

Niimi said the key was “a total elimination of waste,” such as making assembly lines shorter and more flexible so that profit is generated, even at small volumes.

He showed a time-lapse video, in which a line was extended in just 78 minutes by moving chunks of it and putting it together differently as though they were Lego parts.

Another example was welding without sparks called “sputterless.” Sparks can lead to defects on car bodies and slow production.

Toyota, founded in 1937, has long believed scale can backfire and has relied on “just in time” production, or manufacturing only as much as there is demand for. When it still lacked money and technology to compete against the more powerful U.S. automakers, it resorted to raising the efficiency of, and empowering each worker.

Toyota was on a steady growth path through 2007, but stumbled with the financial crisis and its massive global recalls three years ago. The earthquake and tsunami in northeastern Japan last year followed by flooding in Thailand, which disrupted supplies, added to its woes.

Niimi acknowledged Japanese manufacturing faces tough times. Along with the strong yen, Japan fell behind Korea in promoting free trade, he said.

Japanese companies have also been hit by an electricity power crunch because of the nuclear crisis caused by the meltdowns at the Fukushima Dai-ichi nuclear plant, according to Niimi.

Toyota has been beefing up quality controls, and investing in emerging markets such as Southeast Asia and India, to keep growing. Transferring its production ways to such new markets is critical.

The global auto market is still growing, despite setbacks during the financial crisis. Global production last year was a record 78 million vehicles, driven by growth in China, India, Brazil and other newer markets.

“If we lose to yendaka, there is no future,” said Niimi.

___

Follow Yuri Kageyama on Twitter at http://twitter.com/yurikageyama

More Yuri Kageyama.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments are not enabled for this story.

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: Chekhov's story mirrors Russia's own

Recommendations