Toyota's massive engine overhaul

TOYOTA CITY, Japan -- Toyota Motor Corp., after long neglecting the humble internal combustion engine in favor of hybrids, is preparing a sweeping powertrain makeover.

The automaker is designing common parts to spread costs across large numbers of engines.

This will allow it to economically customize engines for specific vehicles with fuel injection, turbocharging and more.

The new engine strategy will catapult Toyota ahead of rivals, Koei Saga, senior managing officer in charge of powertrain development, told Automotive News.

Toyota is seeking fuel economy increases of up to 30 percent and cost cuts on key components of up to 50 percent.

The strategy underscores how Toyota is playing catch-up in a fundamental field, as rivals gain on the automaker's top fleet average fuel economy in the United States with big advancements in such fuel-saving technologies as direct injection, turbocharging and stop-start systems.

For years, Toyota has focused on its best-selling gasoline-electric hybrid systems. It hasn't abandoned that track.

But flush with record profits, the world's biggest automaker is channeling big investments in making its base engines more competitive.

Its gambit: The more money it can save through common parts, the more it can spend on such add-ons as turbochargers, which Toyota engineers internally refer to as kanzashi, the traditional ornamental hairpins worn by geisha.

For mainstay nameplates such as the Camry sedan, it could mean dumping a V-6 engine option and turning to downsized turbocharged four-cylinder engines.

"We would like to achieve No. 1 performance in fuel economy and cost for all the engines that we will be developing," Saga said in a Monday, July 7, interview at the company's global headquarters.

"We are spending more time concentrating on improving the basic performance of engines," he said. "That means we can maintain leadership in the market for a long time."

The new engines will be the cornerstone of Toyota's overhauled product development strategy. The approach, dubbed Toyota New Global Architecture, or TNGA, aims to maximize common parts in a new era in which its annual sales exceed a massive 10 million units.

Toyota's makeover comes as rivals such as Honda Motor Co. and Mazda Motor Corp. overhaul their engine lineups to meet increasingly stringent fuel economy regulations. Honda's line of Earth Dreams engines taps direct injection technology and turbocharging. Mazda's Skyactiv engines pair fuel injection with high compression ratios.

Toyota's first TNGA cars, complete with new platforms, are due in 2015.

But the first of the fresh engines debuted in April in the Toyota Passo, a Japan-market hatchback. That 1.0-liter powerplant, equipped with stop-start technology, delivers 30 percent better fuel economy than the outgoing engine.

It is one of 14 engines to be introduced through next year, covering 30 percent of Toyota's global nameplates.

Other nameplates in line for the new engines: the next-generation Prius hybrid, due at the end of 2015, and the next-generation Camry, which could arrive around 2016.

The goal is to cut costs and maximize performance by standardizing the basics: bore, stroke, combustion cycle, valve timing and components such as engine blocks, cylinder heads, cam-shafts and crankshafts. After that is where the hair ornaments come in.

"First, we have to improve the performance of the base engine itself, then on top of that we will be utilizing kanzashi as occasion demands," Saga said.

"Just like putting something beautiful on top of your hairdo, by using kanzashi through such things as turbocharging or downsizing, you can improve the performance of the engine."

Kanzashi add-ons may include direct fuel injection, exhaust gas recirculation systems or stop-start technologies that turn off the engine when the vehicle stops.

"We have a wide variety of kanzashi," Saga said.

The usual downside of kanzashi is added cost. But Toyota aims to rein in cost by standardizing the base engines, thereby freeing funds to invest in customized tweaks. After the overhaul, the number of engine families should remain the same at seven. But the number of variants will be greatly reduced, Saga said.

By simplifying the lineup, Toyota expects to generate two to three times the cost savings over previous engine overhauls. The cost of some components will fall by half, he said.

"Traditionally, when you add new kanzashi, that increases cost, and we struggled to absorb it and profit margin deteriorated," Saga said. "But by improving our design and bundling volume, in some cases we were are able to reduce costs by half."

The first wave of engines is being manufactured on existing engine lines. But future engines, including those for the next-generation Camry, will get retooled engine lines.

The engine architecture will underpin Toyota's lineup for 10 to 15 years, Saga said.

The EPA's annual report on fuel economy trends, which calculates automakers' fleet average fuel economy based on sales, shows Toyota losing ground to rivals such as Nissan and Mazda. For example, in 2010, Toyota's U.S. fleet average fuel economy was 25.4 mpg. In 2013, it was 25.2 mpg.

Meanwhile, Mazda improved from 24.4 mpg in 2010 to 27.5 mpg in 2013, and Nissan rose from 23.3 mpg to 24.6 mpg during the period.

The next Camry will be the first vehicle getting Toyota's full TNGA treatment, complete with a new platform and an engine built on a TNGA-tailored line. Other TNGA cars arriving before then, including the Prius, will get TNGA engines made on existing lines.

One possible "hair accessory" for the Camry: Toyota is considering a downsized inline-four turbo as an alternative to the V-6, Saga said.

"It might be able to replace a six-cylinder with a four-cylinder plus turbo plus direct injection," he said. "Compared to a V-6, we think this solution will be less costly."

But marketers are evaluating whether Americans will accept the idea.

"Eventually we think this is where the technology is going, but right now we don't know what the reaction of U.S. customers will be," he said. "So probably right up until the last moment, we will have to be ready with both and watch customer feedback."

Toyota's caution comes as rivals plunge into downsized turbocharging, especially Ford Motor Co. with its EcoBoost line of small, fuel-efficient turbocharged engines.

The engines are the first developed at Toyota's new Powertrain Joint Development Building, a massive 12-story r&d center that opened last year at Toyota's global headquarters. Saga is the center's vice president.

For the base engines, Toyota takes a multipronged approach to better fuel economy:

• Lean-burning Atkinson cycle combustion in regular cars, not only hybrids.
• New intake ports create a vertical air-fuel swirl for more rapid combustion.
• Expanded variable valve timing improves combustion efficiency.
• A high compression ratio improves power and efficiency.

The deployment strategy marks the first time Toyota will put an Atkinson cycle engine in a vehicle that isn't a gasoline-electric one.