Why Toyota Cost Less

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Old 06 Oct 2006, 04:35 pm   #1 (permalink)
Dick Byrd
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Default Why Toyota Cost Less

I thought this was an interesting analysis as to why Japanese cars are such
a better bargain.
Dick
'***************
Why Japanese Cars Earn $2400 More Profit Each
A latest auto industry report says that Japanese cars make $2,400 more
profit per car than US ones. Most interesting was that beyond cost
efficiencies and less onerous healthcare obligations, Japanese cars also
just plainly sell for higher prices.

Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. persuaded buyers
to pay an average $24,289 per vehicle, 12 percent more than U.S. automakers.
The Japanese paid $1,400 less per vehicle on health care, and their workers
spent more time on the job.

Here is the cost breakdown:

a.. Japanese spent $1,400 less per car on health care benefits. The
majority of the US disadvantage comes from paying healthcare benefits to
retireees, of which GM has 338,000 to support.
a.. Toyota spends $348 per car on warranty costs vs. $500 for GM and
Chrysler
a.. US automakers spend $138 more per car on longer holidays
a.. They also spend $70 more per car on worker absenteeism
a.. Japanese spent $133 per car on 30 minutes of break time/day vs. $203
per car on 46 minutes of break time for US counterparts.
Another major cost advantage for Toyota has been the use of standardized
parts.

Toyota saved $1,000 per vehicle over the last five years by designing
components such as hinges and air bags so they can be used on a wide variety
of cars and trucks. One U.S. automaker offers 81 varieties of side-view
mirrors, compared to two for its more efficient Japanese rival.

Healthcare we can blame on unions and Japan's public healthcare system. But
cost inefficiencies from using non-standardized parts and lower average
selling prices seem much less excusable for US automakers. Fixing just these
two things alone could close the gap.




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Old 06 Oct 2006, 11:09 pm   #2 (permalink)
mack
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Default Re: Why Toyota Cost Less


"Dick Byrd" <rbyrd@byrdmische.com> wrote in message
news:w_zVg.23532$iA5.11282@dukeread11...
>I thought this was an interesting analysis as to why Japanese cars are such
>a better bargain.
> Dick


> a.. US automakers spend $138 more per car on longer holidays
> a.. They also spend $70 more per car on worker absenteeism



They have an interesting way of dealing with absenteeism at Toyota's
Georgetown, KY plant, where most Camrys are made and ALL Avalons and Solaras
are made.
They put the names of all those employees who have perfect attendance
records for the year into a drum or a hat, and pull out fifteen names.
Those fifteen employees get a nice reward....a brand new Toyota, with Toyota
even paying for the tax and license. Not too shabby.

They also have an employee suggestion system which solicits ways that the
autos can be made more quickly and efficiently, and if the employee's idea
is accepted, he gets a portion of the company's savings for his idea....and
these prizes amount to thousands of dollars sometimes.


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Old 07 Oct 2006, 12:15 am   #3 (permalink)
EdV
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Default Re: Why Toyota Cost Less

Generally speaking, if you compare a Front wheel drive (FWD) and a Rear
wheel drive (RWD) car, the FWD has fewer parts. Less parts, lower cost.

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