Toyota Motor Corporation and its wholly-owned subsidiary Daihatsu Motor will establish an internal company responsible for compact vehicles for emerging markets on 1 January 2017. The new division is the Emerging-Market Compact Car Company. The internal company’s objective is to establish work processes “untethered by conventional practices and rules” to introduce cars based on Daihatsu’s approach to manufacturing affordable small cars. Daihatsu President Masanori Mitsui will be appointed chairman and Toyota Managing Officer Shinya Kotera will be president of the new company.
Toyota is under intense competitive pressure from global automakers and is experimenting with a different organizational approach to getting mini cars to market. Honda, Maruti and Tata come to mind, among others come to mind here. However, this – potentially – could also change Toyota’s approach and cost basis to compact vehicles in established markets.
The move follows the announcement in October that Toyota and Daihatsu would work toward establishing the internal company. (Daihatsu Takes Lead from Toyota in Emerging Markets) It will be based on Daihatsu’s approach to manufacturing affordable vehicles for emerging markets where the potential for growth is high, but also where competition and regulations are intensifying. Daihatsu’s expertise heretofore is in mini-vehicles – so-called kei cars – not larger compacts, so it’s an expansion for Japanese automaker.
Internal Mission Statement
- With the utmost priority placed on emerging markets, the new internal company’s objective is to establish work processes untethered by conventional practices and rules and to introduce competitive ever-better cars based on Daihatsu’s approach to manufacturing affordable, high-quality products.
- The new internal company is to consist of three divisions: The Emerging-market Compact Car Product & Business Planning Division, the Emerging-market Compact Car Product Planning Division and the Emerging-market Compact Car Quality Planning Division. Furthermore, Toyota Motor Asia Pacific Engineering and Manufacturing Co., Ltd. (TMAP-EM) is to be renamed Toyota Daihatsu Engineering and Manufacturing Co., Ltd. (TDEM) and become an entity under the new internal company.
- The Emerging-market Compact Car Product & Business Planning Division, which is to span both Toyota and Daihatsu, is to conduct overall planning for products and business operations, including making proposals for the Toyota-brand vehicle product lineup for emerging markets and for overall strategy.
- Although Daihatsu will basically have responsibility for product development for emerging-market compact cars, the new internal company’s Emerging-market Compact Car Product Planning Division and Emerging-market Compact Car Quality Planning Division will be responsible for final product development and quality for Toyota-brand vehicles.
- With the establishment of the new company, TMAP-EM, which has hitherto specialized in providing Toyota development, logistics and production preparation support for locally produced vehicle models, is to also be responsible for supporting the production of Daihatsu-centered compact vehicles for emerging markets.