Dubbed "Toyota New Global Architecture" (TNGA), the new multi-faceted production strategy is expected to come to fruition in 2015, when Toyota will introduce newly developed vehicle platforms in stages.
IHS Automotive perspective | |
Significance | Dubbed Toyota New Global Architecture (TNGA), the new production strategy is expected to be implemented in 2015, when Toyota will introduce newly developed vehicle platforms in stages. |
Implications | The TNGA is a multi-faceted production framework that will engender product enhancement, component standardisation, production efficiency and procurement synergies – all aimed at making cost-effective but more efficient and attractive products. |
Outlook | The initiative will be a major component in Toyota's strategy to maintain its competitive edge and the position of the world's best-selling OEM. |
Toyota has announced further details of its Toyota New Global Architecture (TNGA) initiative, its new development framework aimed at achieving radical advances in product appeal while at the same time reducing cost. The details follow the announcement earlier during the month (6 March) of the establishment of the TNGA Planning Division, set up to propose technology-based medium-to-long-term product strategies. "Global competition among automakers is becoming more severe, and TNGA is an effort to make more efficient and more attractive products," said Toyota executive vice-president Mitsuhisa Kato.
The initiatives being taken by Toyota under the TNGA programme are described below:
- Enhancing product strength: To develop next-generation platforms for cars with emotional appeal, Toyota will redesign cars starting from the frame, adopting lower bonnets, lower centre of gravity and creating more attractive designs that ensure excellent visibility and improved fundamental functionality such as ride, turning and stopping. TMC will introduce the new platforms in stages, starting with new models to launch in 2015. Kato did not divulge the name of the first vehicle to be produced under the TNGA.
- Making "ever-better cars" and increasing development efficiency: The first step of the TNGA development process is to finalise the medium-to-long-term product line-up and determine, within Toyota's vehicle architecture, characteristics such as driving position, major powertrain components and their positioning within the vehicle. Through grouped development – the simultaneous planning and development of multiple vehicles based on the predetermined vehicle architecture – common parts and major components can be adopted and their development efficiency can be increased. Through the introduction of TNGA, Toyota aims to increase the efficiency of the development process by 20-30% and to invest the resulting savings in the creation of ever-better cars.
- Manufacturing reforms: Major components that are simpler and easier to manufacture will be created by integrating the operations of suppliers and divisions responsible for procurement, production engineering and research and development (R&D). This will facilitate the establishment of a streamlined manufacturing processes and ensure higher manufacturing quality.
- In sync with global standardisation measures: Until now, parts for Toyota and Lexus vehicles were developed according to the automaker's own specifications. From now on, Toyota will seek the compatibility of certain parts it uses with standard parts used by many automakers globally.
- Procurement cost-effectiveness: The procurement divisions will achieve even greater cost-effectiveness by placing global bulk orders for multiple models across regions and timeframes as a result of the use of common parts and major components under grouped development.
Outlook and implications
The TNGA programme, originally unveiled by Toyota in April 2012, will initially focus on developing three new platforms – one that is used in the Camry mid-sized sedan, another used in the Prius hybrid and the Corolla small sedan, and the one used in the Yaris subcompact car (see World: 10 April 2012: Toyota Unveils New Framework to Reduce Costs, Development Time). The plan is to keep a greater proportion of core parts in different vehicles as uniform, while leaving some flexibility to suit local market specifications. Such standardisation will reduce the variety of parts, thus cutting costs.
The Japanese automaker's shift in production strategy, however, still lags behind those of competitors like Germany's Volkswagen (VW), which pioneered the strategy, having introduced such platform standardisation years ago.
By speeding up its efforts to standardise component designs, Toyota aims to cut its capital expenditure on parts procurement by as much as half by 2016 (see Japan: 2 March 2013: Toyota Aims to Halve Capital Spending by Standardising Component Designs—Report). The new production strategy will also help it become more flexible in adjusting to rapidly changing market needs as it expands into more regions, expediting its time-to-market and create appealing products – something it has been often criticised for overlooking. The limitations of Toyota's production methods and supply chain networks were exposed in the March 2011 earthquake and tsunami disaster in northeastern Japan. Damage to facilities of key suppliers in the area had a worldwide impact on Toyota's supply chain, stalling production for months.
Although somewhat delayed in comparison to the rest of the industry, the TNGA initiative, nevertheless, is an important step taken by Toyota that is expected to help it maintain the position of the world's best-selling automaker that it recently earned achieving record global sales in 2012, even as General Motors (GM) and VW keep snapping at its heels. This is echoed by Kato, "We may be behind in terms of the timing. But in the end, what matters is the ability to make good products."