Toyota To Initiate Structural Changes Soon

Toyota To Initiate Structural Changes Soon

 

Toyota to start making changes in its structure soon.

Toyota Motor Corp. is the largest automaker across the globe when it comes to the sales. The company is trying to come up with various new techniques to manage its resources. The Japanese auto manufacturer retails more than 10 million cars thus it is important for it to have better organizational structure.

The company wishes to implement substantial changes within its organization so that it can become more efficient. As per the Wall Street Journal, the company has decided to break itself into smaller units that are products centric from the start of April.

The automotive giant will establish almost seven units that will be based on products. each of the product will lay the foundation of Toyota’s “in-house companies” as per the Wall Street Journal. The company will make the managing officers on senior levels as the president of these divisions. These individuals will then head the production mechanism of these segments.

Since the fiscal year of 2015, the company has come up with a new mechanism, where it has structured its sales on regional basis. The units are thus divided on the basis on developed markets, engines and transmission, emerging markets along with the luxury division of Lexus. However, the company is now inclined to establish divisions that are generally more product based.

The seven segments will be broken down into Lexus brand, compact cars, mid-size cars, and commercial cars. Along with this, the other will streamline its focus on connected cars, advanced technology and power trains. The division is a great milestone achieved by the company since it will allow them to make smart decisions faster. Every president will be responsible for one particular unit which will result in efficiency in the long run for the company.

As per the Wall Street Journal, the automotive giant cleared that the new units of the company will function in collaboration with the old regional units. The company is embracing new changes since various emerging markets across the globe are opting for preferential changes in their cars. Other than this, changes are also being made to the emission standards. The company designs models as per the niche requirement of the particular market, thus the new restructuring plans will eventually result in making the company more brands centric.

 Toyota Motors has been successful in reporting sales that exceed 10 million units for the past couple of years. This has enabled them to give a tough time General Motors Company and Volkswagen AG. By the end of January, the company made an acquisition of Daihatsu for $3 billion so that it could expand its operations in Asia by manufacturing compact vehicles.

Earlier, the company owned almost 51.2% of the stakes in Daihatsu and the decision to opt for an acquisition will enable the low cost brand to start using the high end technology deployed by Toyota. The company might also get a better share of the minivan market in Japan which is currently being dominated by Suzuki. There are numerous growth prospects for the company in the automotive industry.