Toyota’s Shift to Modular Platforms Expected to Cut Production Costs by 20 Percent

Toyota has announced plans for massive savings in vehicle development and factory investment, as well as fuel efficiency gains. The automaker will launch an aggressive restructuring this year as part of a switch to new modular product platforms which is aimed at lifting global sales beyond 10 million units annually.

Toyota is therefore following in the footsteps of the VW Group, grouping bigger families of vehicles for production and development. In doing this, the company targets a 20 percent reduction in production costs and, in the long run, a reduction of the variety of parts across multiple nameplates by as much as 75 percent.

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

Additionally, Toyota announced the changes will reduce the investment needed to build a new plant by 40 percent. The company is also developing a new generation of engines that will be up to 25 percent more fuel efficient than those in current models, while producing 15 percent more power. For example, the next-generation hybrid drivetrain which will debut on the all-new Toyota Prius at the end of this year will be 15 percent more economical.

“This is a period to rework our development and production sites. We will make a comprehensive new start,” Mitsuhisa Kato, Toyota’s executive vice president in charge of R&D, was quoted as saying by Automotive News. The executive added that the first cars based on the Toyota New Global Architecture (TNGA) will be C-segment, front-wheel drive models scheduled to debut later this year.

While he didn’t get into details, the family of cars he hinted at include the Prius hybrid, Corolla and Lexus CT. The approach will be applied first to three front-wheel-drive vehicle platforms that make up about half of the company’s global production volume. Kato said that by 2020, roughly half of the company’s vehicle lineup will be converted under the new strategy.

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