Automobile Blog

Toyota’s ‘Simple Slim’ Cuts Costs of Camry Engines 50 Percent

Foundry workers at a Toyota Motor Corp. plant in Troy, Missouri, laughed out loud back in 2003 when Toyota Executive Vice President Kosuke Shiramizu traveled from Japan and gave them a new assignment: Cut in half the cost of building V-6 engines for the company’s Camry sedan by 2005.

“We were thinking they were either crazy or didn’t really mean it,'’ says Robert Lloyd, 51, who, as president of Toyota’s Bodine Aluminum Inc. unit, would be expected to deliver on Shiramizu’s goal.

Shiramizu, however, had a secret weapon. Back in Japan, 300 engineers were working on a new technology for pouring molten aluminum into molds to create parts for engines. The new equipment, part of a larger Toyota cost-cutting program called Simple Slim, allows Toyota to use smaller and cheaper molds.

The new engine technology is now in use not only at Bodine, which Toyota bought in 1990, but also at foundries in Japan and China. Partly as a result, the cost of building an engine for the redesigned Camry that was scheduled to go on sale in March will be about $1,000, half the cost of an engine for the previous generation of Camrys, says Gary Convis, executive vice president for North American manufacturing.

“It’s amazing how Toyota can cut costs even further,'’ says Atsushi Osa, whose $4.1 billion fund at Sumitomo Mitsui Asset Management Co. in Tokyo includes automotive shares. “This definitely gives them a competitive edge over their rivals.'’