- The Washington Times - Friday, December 22, 2006

NAGOYA, Japan (AP) — Toyota is about to become the world’s largest automaker. But you didn’t hear it from them.

At a press conference yesterday, Toyota Motor Corp. executives laid out a production target that likely will allow the company to take the bragging rights from General Motors next year. But soft-spoken company President Katsuaki Watanabe chose to focus on the company’s plan to beef up quality control, rather than bragging about topping GM.

“That’s just what the results may be,” Mr. Watanabe said quietly at a hotel in Nagoya, near the company’s headquarters in Toyota City.

Mr. Watanabe noted that Toyota’s good fortunes had gotten a boost from a major outside factor — surging oil prices that made their cars more appealing to drivers.

The Japanese automaker set a global production target of 9.42 million vehicles for next year, marking a 4 percent increase over the 9.04 million vehicles it expects to produce this year and easily beating the 9.2 million General Motors Corp. is estimated to have produced this year.

The bullish outlook lifted Toyota’s stock to a new closing high of $66 in Tokyo.

Detroit-based GM has not given targets for next year, but it has been forced to scale back production recently after seeing its market share eroded by Toyota and other Asian automakers, which have a reputation for better mileage.

Mr. Watanabe also told reporters the company was considering adding another plant in North America — a region where Toyota and GM’s contrasting fates have been especially stark. He did not give details of the plans.

Instead, he talked about how the company had to brace for bigger size by tightening up quality controls at all stages of the process, including design and development as well as production.

Toyota has been beset with a rising number of recalls as it standardizes parts to cut costs and develops more vehicles at a faster pace. Its challenge is to maintain its reputation for quality cars and customer satisfaction as it continues to rev up production.

“There will be no growth without quality,” Mr. Watanabe said. He stressed that quality will be closely monitored at all levels of production, including design, development and procurement.

Mr. Watanabe said he expects recalls in new models to taper off in the coming year, as the measures the company has taken recently kick in. But he acknowledged concern about older models on the streets.

“The recalls have alarmed society and caused worries for our customers. I’d like to take this opportunity to apologize again,” he said.

Although GM says the perception its cars are gas guzzlers is unfair and inaccurate, the company is undergoing massive restructuring after amassing more than $10.6 billion in red ink last year and $3 billion more in the first nine months of this year.

Toyota, on the other hand, is reporting record profits, churning out best sellers such as the Camry and Corolla as well as carving out a reputation for hybrids, which use a fine-tuned technology of switching between a gasoline engine and electric motor to save gas.

Toyota is opening new plants in Russia, Thailand and China next year to keep up with demand.

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