Toyota Launches New Models in Recovering Northern Japan, Expects Soaring Profits

Category: Companies / May 11, 2012 2:46PM EDT

Japan's biggest carmaker Toyota launched new models of its flagship semi-compact Corolla on Friday at its affiliate Central Motor's factory in northern Japan, which experienced a shut down after the earthquake last year.

The magnitude 9.0 quake last year damaged factories of hundreds of auto parts makers, particularly those of electronics components concentrated in Japan's northeast. Toyota, known for its expertise in supply-chain management, which is part of the lean production system it pioneered, was no exception.

The Central Motor factory was far from the tsunami-struck coastline and was affected by only minor damage by the earthquake and aftershocks, but it had to stop its assembly lines for more than a month due to the halt of the supply chains. Toyota’s President hopes the new Corolla will bring back vigor to its brand and to the recovering local economy in the Tohoku region.

The new line-up – featuring an Axio sedan and Fielder station wagon - is the 11th model since the popular vehicle's debut in 1966 and the first complete remodeling of the Corolla since October 2006. The downsized, simple design targets Japan's elderly consumers making the vehicle easy to drive in narrow alleys and small parking lots in Japanese cities.

To diffuse the risk of a massive earthquake hitting its core manufacturing hub in central Japan, Toyota is on its way to establishing Tohoku as a third domestic production base, joining a second one on the southern island of Kyushu. Toyota has announced that it’s committed to building 3 million of its 7.5 million vehicles a year in Japan, triple the volumes for both Nissan and Honda. With Toyota's business growing in Tohoku, the region's government expects an estimated 1,200 companies could get new or more work from the auto industry.