Toyota reorganizing its manufacturing operations to cut costs

Article by Christian A., on February 18, 2011

As part of efforts to make domestic output more competitive, Toyota Motor Corp. has reorganized its manufacturing operations to reduce costs. It will also boost production of the Corolla car at a new plant in northern Japan.

Yasuyoshi Shirai, executive vice president of Central Motor Co., said that initially, Yaris compacts are being produced by the plant in Miyagi prefecture but that Corolla production will start in April.

said that the factory will eventually build cars for sale in Japan. During the inauguration of the new factory, Cho said that exporting from Japan “doesn't make sense financially” due to the yen’s strength.

However, Cho believes that Toyota shouldn’t be hastily reacting to trends and that manufacturing in Japan should be protected. Toyota is making the northern Tohoku region (including Miyagi) a small-car hub as its Japanese plants face dropping domestic demand and a strong yen that's taking away the competitiveness of exports.

Satoru Takada, an analyst at TIW Inc. in Tokyo, said that Tohoku may seem more attractive due to lower labor costs relative to Aichi prefecture, Toyota's primary domestic production center. [via autonews - sub. required]

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