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Toyota Plans To Cut Compact Cars’ Production Cost

ABR Staff Writer Published 10 June 2009

Toyota Motor plans to cut the cost of producing its compact cars by $1 billion a year, as the demand for compact cars is likely to grow worldwide.

The Japanese automaker plans to use common platforms and parts for bulk of its compact cars by 2012, saving 100 billion Yen per annum, the Nikkei economic daily said.

Toyota, which has relied heavily on large and luxury vehicles to drive its profit growth, now sees that demand for small and eco-friendly cars is set to expand considerably amid the global financial crisis. The company could earn high profits and enhance its operating margins by manufacturing small cars at a lower cost. Toyota also seeks to cultivate demand for small models in emerging markets.

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