Toyota's Katsuaki Watanabe: Savings will be in the 15 to 20 percent range.
Toyota executives were coy about offering details on its Value Innovation program, which Toyota is launching.
"We have no target today" for overall cost savings under Value Innovation, said Katsuaki Watanabe, who will become Toyota's president in June, at a media event here on Tuesday, May 10.
In some areas, the savings will be in the 15 percent to 20 percent range, he said. Engineers are examining a wide range of systems for savings and determining targets for each, he said. These include braking and steering systems.
Over the last three years, Toyota trimmed its purchasing costs by 30 percent under its previous cost-cutting program. That initiative sought savings in component design and engineering, as well as through supply chain improvements.
For example, Toyota redesigned individual parts so that more vehicles could share common parts, thus reducing complexity and costs.
Toyota executives admit that achieving cost savings will be more difficult with prices rising for steel, rubber and other commodities.
The automaker is still negotiating with its suppliers over the price of steel for April to September delivery.
"Overall, we will aspire to a level of cost reduction similar to last year," said Takeshi Suzuki, senior managing director in charge of the finance & accounting group. "We wouldn't like to see less than" the $1.49 billion in cost cutting achieved in the last fiscal year. The cost cuts of $1.49 billion were the equivalent of 9.6 percent of Toyota's operating profit in the last fiscal year.
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