The largest of the Japanese car makers has said that it intends to shift more production to avoid currency risk...
Toyota, the Japanese mass producer of cars which recently took a first step into Formula One motor racing, has revealed extensive expansion plans in a bid to boost its European market share from 3.8% to 5% over the next three years.
"Last year we sold 666,500 units. This year we want to exceed 700,000 units. We have a goal to reach 800,000 units by 2005," Toyota Motor Europe president and chief executive Akira Imai said.
The ambitious push comes at a time when most volume car makers are reining in spending and slashing overcapacity.
As part of the move, Toyota will produce a larger percentage of its cars within Europe where they will be sold. "As soon as possible, we will establish our entire organisation and its systems to avoid external currency risk," Mr Imai said. "That means...more local procurement and more locally produced units."
Toyota already has production facilities in the UK and France.
And Toyota recently asked the German automotive engineer Porsche, which is already making transmissions for the Japanese company, to produce engines for some of its models as well. "In the future, according to our growth strategy, we will have to think of expanding our production capacity further," Mr Imai said.
The move to boost production in Europe may seem illogical given that Toyota's European sales have been boosted in recent months by the weakness of the yen which has made imports from Japan cheaper for Europeans. The decision to invest during a downturn may also puzzle some, but Mr Imai insisted that both moves would prove right in the long run.
"We really believe that ultimately the customer, rather than the currency valuation, decides the sales performance," he said. As such, success would be linked with "the quality of the product and with how much you invested in the past to improve the product and in research and development," Mr Imai said.
Non-Japanese car executives, mainly in the US, have raised their voices in recent weeks to protest what they see as a deliberate weak yen policy that aims to help the Japanese industrial exporters. But such criticism was not taken onboard by Mr Imai.
"Personally I believe that what is happening in the US market is not due to the yen-US dollar relationship," he said.
Toyota should be able to reach its increased market share targets by taking advantage of the company's nimble feet, Mr Imai insisted. "In the past, when I first joined the company, the move from design to the completion of a car would take about 48 months.
"Right now, all over the world, the competition's standard is 20-24 months, but I would like to say that in Toyota's case it is far less than this.
"Development duration will, off course, be shortened further," Mr Imai said.
"At the same time, consumers' expectation levels have been increasing," Mr Imai said.
To meet these raised expectations, "our engineers are always required to develop [new products] faster and [to develop] more state of the art products".