Toyota Plans Over 20% Increase in Production in 2012

Posted by Stephen On Saturday, December 17th, 2011

Did someone forget to send Toyota the memo? You know — about how the markets are failing, the Euro’s going to collapse, we’re heading into at least a double-dip recession (or even a depression) … and let’s not forget that one about the world ending in 2012.

At Toyota, the glass is not just half-full — they seem to think it’s overflowing.

Get this: Toyota announced December 16th that they would be increasing production by over 20% in 2012. But, I hear you say, with the earthquake in March and Thailand floods later in the year, 2011 production is a low level from which to make this increase. That’s what I thought, but no: Toyota (including their Lexus brand) is aiming to produce a record 8.65 million vehicles in calendar year 2012.

So how do they propose to navigate world financial upheaval — as well as the burden of a persistently strong Yen? Well, Toyota is pinning its hopes on the emerging markets on the one hand and cost savings on the other. Concerning the former, Toyota is betting that emerging markets will continue to provide strong demand despite the European crisis. For the latter, they are obviously planning on driving their suppliers ever harder.

Will emerging market demand be there to counterbalance an EU / developed world recession? Toyota’s forecast has to put it at the optimistic end of the spectrum. China is a key part of that equation, and someone has surely noticed that the EU as a block is China’s biggest export market, beating the US. Turmoil in the EU will surely put a drag on China’s expansion.

There is also the question as to how much leaner suppliers can make their operations. New tech is always coming along and incremental productivity increases are foreseeable, but Toyota is surely going to ask them to makeĀ  quite a leap to meet this production target.

Personally, I think Toyota’s recent stated goal to change its core values is going to be a more important factor in the long term. It’s not enough now to be boring but good. A lot of manufacturers can do that. The Koreans, for one, are out Toyota-ing Toyota right now. No, the move to making its cars interesting and fun to drive is long overdue — and vital if Toyota doesn’t want to fade away, in the manner GM has in recent years.

So what do you think? Glass half empty? Half full? Broken? Tell me what you think about Toyota’s ambitious 2012 goals in the comments below.

Source: Nikkei

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