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S. Muralidhar

ON ITS way to becoming the world's second largest and the most profitable manufacturer of automobiles, Toyota has been on the quest to cut costs, even while maintaining the highest standards of quality for its vehicles. In the past, Toyota's product strategies such as for its luxury marque Lexus and its hybrids have been so well thought out that they have become legendary moves that the rest of industry also tried to emulate.

The IMV (short for Innovative International Multi-purpose Vehicle) project could turnout to be one such masterstroke. Toyota initiated the IMV project to create an optimised global manufacturing and supply system for pick-up trucks and multi-purpose vehicles to satisfy market demand in more than 140 countries, including a few developed markets and not necessarily only the emerging ones. The project is a purposeful attempt at setting up a system of manufacturing in multiple locations to capture `locational' advantages and to come up with a relevant, affordable product for these markets, all the while ensuring adherence to Toyota's quality standards.

On a geographical and historical scale, the IMV project represents the third phase of manufacturing for Toyota. In the first stage, Toyota made vehicles only in Japan and exported them worldwide.

This was followed in the second stage by local manufacturing in the key market areas. Now, supported by trade liberalisation, such as CEPT (common effective preferential tariff) in the Asean countries and other free trade agreements, Toyota has entered the third stage by building a more efficient production and supply system on a global scale to manufacture vehicles that are even more affordable.

As a result, the components for the IMV project vehicles are manufactured almost entirely outside Japan, in a few countries in the Asean region. It is a demonstration of the confidence that Toyota has gained over the quality of components and manufacturing in many countries, which have been integrated into the IMV project. It is also an indication of the potential that these markets hold for Toyota in the long term.

The IMV project plans include the manufacture of five different vehicle types, all of which will be built on a common IMV platform.

While the platform is said to be so versatile that even small cars can be built on it, the initial bunch of vehicles will include three pick-up trucks (the Hilux range), a minivan (the Innova) and an SUV (the Fortuner). The IMV plan calls for specific components to be manufactured in individual locations that will then be exported to all IMV project countries.

So, diesel engines are made in Thailand, petrol engines in Indonesia and manual transmissions are made in India for supply to the countries charged with vehicle production. For vehicle assembly, Toyota will use plants in Thailand, Indonesia, Argentina and South Africa. These four main IMV production and export bases will supply to Asia, Europe, Africa, Oceania, Latin America and the Middle East with the five all-new IMV vehicles.

Toyota has had a steady climb to becoming the world's second largest automobile company in terms of sales. That milestone, which was crossed last year, took some time coming. But with worldwide production of vehicles under the IMV project projected to touch 500,000 units in 2006, this new project, along with the sales from some of Toyota's other initiatives such as the one with PSA Peugeot Citroen have the potential to take this company to the top slot.

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