The Toyota and PSA/Peugeot-Citroen small-car project in the Czech Republic is on schedule, says Toyota President Fujio Cho.
In addition, the Japanese head of the new venture said that 'if things go smoothly,' Toyota, Peugeot, and Citroen each will launch its version of the new car at the same time, in 2005.
In a signed statement, Cho said everything is proceeding as planned. A groundbreaking ceremony for the partners' new plant in the city of Kolin will be held on April 10.
Toyota and PSA expect to choose suppliers for their co-developed car 'as soon as possible,' said Masatake Enomoto, 48, who will be named this month as president of Toyota Peugeot Citroen Automobile Czech.
'For those major expensive items, we will come up with a clear assumption within this year,' he said.
Enomoto said he was 'shocked' when he saw the story in Automotive News Europe (March 11 edition) headlined: 'Toyota says PSA is a little slow.'
The story quoted Joshio Shirai, Toyota board member responsible for front-wheel-drive vehicle development, as implying that PSA's purchasing procedures might delay the start of production.
'It is not correct,' Enomoto said.
He admitted that, to meet strict cost targets, 'we are taking a little more time to find good solutions to meet our stringent target. It is a common goal. It's not something to point fingers at each other and blame each other,' he said.
'Each company has its own way' of allotting time for purchasing, product development, or product preparation, he said. 'So we have to discuss, and we have to come up with nice compromises.'
Enomoto added: 'It's a common, agreed-upon way of doing things. And in that process, we are learning many things from each other, and we are developing good confidence in the success of this project.
'Actually, both companies are really enjoying this. We're learning so much from each other,' he said.
Enomoto said that 'if things go smoothly,' Toyota, Peugeot and Citroen versions of the new model would be launched simultaneously in three years' time. But he admitted that designs for the three brands' cars have not yet been finalized.
In addition, exports beyond Europe are possible to 'anywhere else,' depending on demand in Europe and elsewhere, Enomoto said.
'Our first goal is to be a success in the European market,' he added.
Both Toyota and PSA plan to position the new car, in size and price, below the lowest entry-level models currently in their European lineups.
The new car will be about the size of the old Fiat Cinquecento, or 3300mm in length. That would be smaller than the Toyota Yaris, Peugeot 106 and Citroen Saxo.
It will be a 'Pan-European' car that meets safety standards for all western, central and eastern European markets, Enomoto said.
'We have no intention whatever to compromise in terms of safety or other performance' to hold down costs, he said.
The four-seater will have three- and five-door versions. For Europe, the car will have right- and left-hand-drive derivatives. It will be sold in Europe with a 1.0-liter, three-cylinder gasoline engine or a 1.4-liter diesel engine.
Although the Toyota, Peugeot and Citroen versions each will have distinct exterior styling, Enomoto hinted that there would not be much difference in the interiors.
'We have many variations already. The more you add variations, the more difficult it is to maximize efficiency. At least at the beginning, we'd like to make it simple,' he said.
Toyota's styling studios near Nice, France, and in Toyota City have each submitted a design for the Toyota car, but the winning design has not yet been chosen, Enomoto said.
Enomoto said Toyota and PSA have followed a 'big room concept,' with purchasing and product-development managers working side-by-side to improve communications.
'We have to share the responsibility,' he said.
For example, he said, Toyota has had two designers working with PSA's purchasing staff on the instrument panel for four months already, so that everyone knows what the cost will be if one approach is chosen over another.
Enomoto praised PSA's 'professionalism' repeatedly. The French company's methods are 'very clear, transparent, quick and very logical,' he said.
'We, Toyota, are a practical company. But they are a more practical company, requiring more logic and lots of explanation on why this is necessary or not necessary. It's also very clear who is responsible for what,' he said.
At Japanese companies, it often is less clear who is responsible for a given task, he said.
'When you negotiate with [PSA executives], it is sometimes very pleasant,' Enomoto said.
In his signed statement, Toyota President Cho also said: 'From the first day of our partnership, we at Toyota have felt comfortable working with our counterparts at PSA.
'I have been impressed to see how much our two organizations actually have in common,' Cho said. 'We share an emphasis on the hands-on approach to decision-making, a dedication to engineering and manufacturing outstanding automobiles, and an untiring attention to quality and cost efficiency.
'All in all, I feel our two companies in some way share the same DNA. Yet we still have a lot to learn from PSA/Peugeot-Citroen at the operational level,' he said.
The new small car will be built at a greenfield plant currently under construction in Kolin, Czech Republic, which will have capacity to make 300,000 cars a year on three shifts.
Toyota is in charge of the development and production, while PSA is responsible for purchasing. Production will start in January 2005. Toyota will take 100,000 units a year, with PSA taking the remainder.
Toyota's Takaoka plant in Toyota City will be the 'mother plant' for the new factory, meaning that it will take the lead in providing training and guidance to the new factory's work force.
Daihatsu, Toyota's small-car subsidiary, is assisting with the project in terms of product development and production preparation before the launch. In those roles, Enomoto said, Daihatsu is being treated and paid as if it were an outside engineering-consulting firm.
Whether Daihatsu will receive a version of the car to sell in Europe is still 'under study,' Enomoto said.
Total investment for the joint venture, including research, development and startup costs, is estimated at E1.5 billion.
'There's no magic or secret' behind the car's planned low cost, Enomoto said. The new venture will hold down costs through the application of 'best practices' from both companies and the economies of scale that the joint partnership offers, he said.
Toyota might use the new car's platform as the basis for its next-generation Yaris, in order to recoup some of the investment money spent on the platform, Enomoto said.
'Of course, that will be an option,' he said. But that has not yet been decided, he added.
Close to the 120-hectare site of the new venture is an equally large site available for component suppliers.
But Enomoto said that use of that site 'is to be decided by the suppliers themselves.'