Toyota unveils first car under new cost-cut scheme

TOKYO (Reuters) - Toyota Motor Corp (7203.T) on Monday took the wraps off its remodeled Crown sedan, the first car to incorporate the cost-cutting strategy that the automaker hopes will help it save at least $2.8 billion a year.

Toyota began work three years ago on the ambitious plan, called "VI" for Value Innovation, which seeks to lump some of the tens of thousands of car components together to form modules and systems. Analysts have been keen to see the fruits of the scheme for hints to its impact on the car's price, features and eventually the competitiveness of parts suppliers.

The 13th incarnation of the high-end Crown series features many examples of cost-cutting measures under the VI plan, enabling Toyota to cap the car's price while packing more safety and other features compared with the previous generation, the company said.

"We were able to enhance the car's cost performance through the VI efforts," President Katsuaki Watanabe told a news conference.

For example, he said, the new Crown combined some electronic control units (ECUs), or mini-computers that control everything from power steering to windshield wipers, with components called actuators to create a simpler module and drive down costs. That in turn enabled Toyota to offer its advanced vehicle stability and safety system across the series as a standard feature, he said.

Wire harnesses and connectors were also integrated, while engineers drastically altered the designs of the keyless entry system and some body parts -- all of which lowered production costs, Watanabe said.

Masatami Takimoto, executive vice president in charge of Toyota's drivetrain technology, declined to disclose how much the VI plan saved the company in the Crown. But he said the automaker was able to reduce the number of main ECUs to four from 60, as it had set out to do.

"If you just took the computer that controls the car's body, we were able to slash the number of ECUs to one-fourth," he said.

Toyota's ability to reduce costs has helped it boost spending on research and development every year, making sure the world's most profitable carmaker stayed innovative and competitive amid rising raw material costs.

The VI plan will be built into each new model that Toyota rolls out going forward, and Watanabe has said he expects it to help the company achieve annual savings of at least 300 billion yen ($2.8 billion) from the business year starting in April.

Priced from 3.68 million yen ($34,100), the latest Crown series costs roughly 200,000 yen more than the previous version, but comes with the high-tech "VDIM" (Vehicle Dynamic Integrated Management) stability and safety system as a standard feature.

Toyota aims to sell an average 5,500 Crown cars a month, including 800 of the newly introduced full-hybrid version, which starts at 5.95 million yen ($55,200) and goes on sale in May.

The Crown, which debuted in 1955, is sold mainly in Japan and China. Toyota will continue to sell the existing version in China, it said.

In what Toyota called a world first, the new version offers a safety device that monitors the driver's eyes and sounds a warning signal if they are closed for longer than what it deems safe. This option costs more than 660,000 yen ($6,100).

The model, once an aspirational car for many Japanese, is widely used as a taxi in Japan.

($1=107.85 Yen)

(Editing by Mike Miller)