The Detroit Free Press paraphrases Masatami Takimoto, Toyota's executive vice president for research, saying Toyota wanted to be the first mass producer of plug-in hybrids.

CNET news reports on the growth of Toyota relative to other automakers and its immediate interest in ethanol. It reports Yusei Higaki, a project manager in the global external affairs division, saying "We are seriously studying the plug-in, especially for short distance drivers," Higaki said. "It doesn't work for long distance drivers."

Detroit Free Press: Auto news
Toyota outlines its plans to grow profits
October 7, 2006
BY JUSTIN HYDE, FREE PRESS WASHINGTON BUREAU
http://www.freep.com/­apps/­pbcs.dll/­article?AID=/­20061007/­BUSINESS01/­610070386/­1014

NEW YORK -- Toyota Motor Corp. outlined to Wall Street analysts on Friday its plans to spur its global profits, saying it was targeting roughly $8.5 billion in cost cuts and considering whether it needed new plants in North America.

The Japanese automaker, which could pass General Motors Corp. as the world's largest automaker as soon as the end of this year, has been spending the past few weeks drawing out its plans to investors around the world.

While GM and Ford Motor Co. struggle to end losses in North America, Toyota expects to boost its profit margins to 10%, among the highest for any automaker in the world.

Mitsuo Kinoshita, Toyota's executive vice president for finance, said the company had cut its parts costs by 30%, or about $8.5 billion at today's exchange rates, since 2000. The new cost-cutting plan has the same goal during a shorter, unspecified time period.

Kinoshita said in this round, rather than simply scrutinize each part for savings, Toyota and its suppliers would review their design systems and find ways to use two parts instead of three, for example.

Toyota has said it expects to sell 8.85 million vehicles worldwide this year, up 9% from last year, and 9.8 million by 2008. Toyota also boosted its profit estimates for the first half of its fiscal year, which began in April, by 32% to about $4.3 billion, in part because of a weaker-than-expected Japanese yen.

While Toyota executives declined to give too many details of their plans, they touched on several questions on new plants, hybrids and quality.

Although Toyota will add 470,000 units of capacity in North America in the next two years, that's not likely to keep pace with its growing sales.

"The demand here in the North American market remains very strong, and what we should be doing in and after the autumn of 2008 is now under consideration and study," said Masatami Takimoto, Toyota's executive vice president for research.

Takimoto said though Toyota was researching hybrid vehicles that could be recharged by plugging into an electrical outlet, such vehicles wouldn't be feasible for mass production without a breakthrough in battery technology. He also said Toyota was conducting battery research and wanted to be the first mass producer of plug-in hybrids.

Both executives said Toyota would work harder to maintain its quality even as it boosts sales, hiring 8,000 technical employees and making more accurate measurements of a vehicle's quality throughout its assembly.

"We will be able to realize quality, which is one order of magnitude better than in the past," Takimoto said.

Contact JUSTIN HYDE at 202-906-8204 or jhyde@....

Toyota branches out into ethanol
The Prius hybrid is just the start of the Japanese carmaker's efforts
to tap into alternative fuels.
By Michael Kanellos
Staff Writer, CNET News.com
Published: October 10, 2006, 4:00 AM PDT
http://news.com.com/­Toyota+branches+out+into+ethanol/­2100-11389_3-6124113.html

TOYOTA CITY, Japan--Hybrid cars aren't the only fuel-efficient concept to have grabbed Toyota's interest.

The Japanese company, now the second-biggest automaker in the world, will come out with a car in Brazil in Spring 2007 that can run on 100 percent ethanol, as well as on a blend of gas and ethanol, Yusei Higaki, a project manager in the global external affairs division, told CNET News.com during a tour of the company's facilities here.

Toyota, the second-biggest automaker in the world, will come out with a car that can run on 100 percent ethanol.

The move is just one of the alternative fuel projects at the Japanese company, which has seen sales of its Prius gas-electric hybrid car take off.

The pricing and the name of the car have not been revealed yet, he added. Brazil is a natural spot to launch the car. Brazilians produce ethanol there from sugar cane, and a number of gas stations sell it.

Toyota has also kicked off trials with gas-to-liquid (GTL) fuel cars in Europe. In GTL, natural gas is converted to a relatively clean form of fuel for diesel cars. The process is similar to the one for converting coal to diesel fuel, but cars running on GTL emit far fewer particulates. Humans, in fact, can drink GTL fuel: You might get sick, but you won't die, one Shell executive said last year. GTL is expensive, but could become popular in megacities where the air pollution from diesel has become a major health hazard.

Toyota is riding a crest of popularity these days. It saw car shipments increase by 25 percent in the U.S. in September, at a time when other major manufacturers--from both the U.S. and Japan--reported declines. Analysts believe that the company will overtake GM in the next few years to become the world's largest carmaker, although it could face problems with quality and customer satisfaction, like Dell, as it grows.

Toyota now has 43 percent of car sales in Japan--excluding the mini-car market--and 16.5 percent of U.S. sales. It will also provide the technology and components for auto competitor Nissan's first hybrids, coming in the 2007 model lineup.

A huge part of the success can be attributed to the Prius, which runs on a combination of electric and gasoline power. Worldwide sales jumped from 28,083 in 2002 to 43,162 in 2003, and hit 175,157 last year. Toyota's goal is to reach 1 million in annual hybrid sales in the first few years of the next decade. From 1997 through July 2006, it shipped 552,657 Priuses--which accounts for 76.7 percent of the 720,516 hybrids shipped by all manufacturers.

Toyota's energy efforts can be broken down into four areas: alternative liquid fuel cars running things like ethanol; clean diesel cars, which include diesel hybrids; hybrids; and electric cars.

The concepts can and do overlap. A GTL car, for instance, is both a clean diesel car and an alternative fuel car, and it could ultimately be reworked to incorporate hybrid technology. Toyota has produced a diesel hybrid truck for Japan that qualifies as both a hybrid and a clean diesel.

Another crossover is the plug-in hybrid. These cars, which can get 100 miles per gallon, are similar to regular hybrids. The difference is that in plug-ins, the electrical engines do more work and the gas engine does less work. On the freeway, the gas motor on plug-ins drives the car, so the benefits mostly come in city driving.

Right now, major manufacturers don't make these plug-ins cars because of the cost of the battery and the lengthy charge times. Battery and auto manufacturers, however, are trying to change that with improved nickel and lithium batteries.

"We are seriously studying the plug-in, especially for short distance drivers," Higaki said. "It doesn't work for long distance drivers."
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