Toyota to combine subsidiaries
Source: Agencies |
July 14, 2011, Thursday
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Print Edition
Print Edition
TOYOTA'S president said the car maker plans to take 100 percent ownership of two auto-assembly companies it partly owns and combine one of them with two other subsidiaries in an effort to strengthen Japanese manufacturing.
Toyota Motor Corp President Akio Toyoda said the moves are aimed at keeping auto production in Japan and will quicken product development so it can remain globally competitive, despite unfavorable conditions such as the strong yen and a growing power crunch.
But they also highlight the serious hardships at Japanese manufacturers that are requiring the joining of forces to ride out tough times. A quake and tsunami disaster in March has disrupted production and a nuclear crisis that followed is threatening the power supply.
Under the plan, Toyota Auto Body Co and Kanto Auto Works, which make Toyota vehicles, will become wholly owned subsidiaries of Toyota by January 2012. Toyota currently owns 56 percent of Toyota Auto Body and 50 percent of Kanto.
Toyoda also said Kanto Auto Works, Central Motor Co, a Toyota auto-assembly company, and Toyota Motor Tohoku Corp, a parts maker, have agreed to start talks for a merger and integration of the three companies, targeting July 2012. Toyota already owns 100 percent of Central Motor and Tohoku.
Fears are growing that manufacturing will move abroad, where labor is cheaper, and a continuously strengthening yen erodes the value of overseas sales. But Japanese auto executives have promised to try to keep jobs in Japan, while also acknowledging the tough times.
The Japanese auto market has been stagnant for years, while overseas emerging markets hold the greatest potential for profit.
A nuclear power plant in meltdown has created a power crunch that is forcing car makers to strive to cut electricity consumption by 15 percent and work on weekends, while shutting down on Thursday and Friday to prevent blackouts.
Toyota Motor Corp President Akio Toyoda said the moves are aimed at keeping auto production in Japan and will quicken product development so it can remain globally competitive, despite unfavorable conditions such as the strong yen and a growing power crunch.
But they also highlight the serious hardships at Japanese manufacturers that are requiring the joining of forces to ride out tough times. A quake and tsunami disaster in March has disrupted production and a nuclear crisis that followed is threatening the power supply.
Under the plan, Toyota Auto Body Co and Kanto Auto Works, which make Toyota vehicles, will become wholly owned subsidiaries of Toyota by January 2012. Toyota currently owns 56 percent of Toyota Auto Body and 50 percent of Kanto.
Toyoda also said Kanto Auto Works, Central Motor Co, a Toyota auto-assembly company, and Toyota Motor Tohoku Corp, a parts maker, have agreed to start talks for a merger and integration of the three companies, targeting July 2012. Toyota already owns 100 percent of Central Motor and Tohoku.
Fears are growing that manufacturing will move abroad, where labor is cheaper, and a continuously strengthening yen erodes the value of overseas sales. But Japanese auto executives have promised to try to keep jobs in Japan, while also acknowledging the tough times.
The Japanese auto market has been stagnant for years, while overseas emerging markets hold the greatest potential for profit.
A nuclear power plant in meltdown has created a power crunch that is forcing car makers to strive to cut electricity consumption by 15 percent and work on weekends, while shutting down on Thursday and Friday to prevent blackouts.
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