Poised to become No. 1, Toyota focuses on quality

Toyota considers building another plant in the U.S. to support its growth.
NAGOYA, Japan (AP) -- Toyota is about to become the world's largest automaker. But you didn't hear it from them.
At a news conference Friday, Toyota executives laid out a production target that likely will allow it to steal 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," Watanabe said quietly at a hotel in Nagoya, near the company's headquarters in Toyota city.
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.
Target
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 an all-time closing high of 7,800 yen ( 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.
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.
Quality
Instead, he spent more time talking about how the company had to brace for bigger size by beefing up quality controls at all stages of the game, including design and development as well as production.
Toyota has been plagued 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," Watanabe said. He said quality will be closely monitored at all levels of production, including design, development and procurement.
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 worries remain 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.
Tsuyoshi Mochimaru, auto analyst with Deutsche Securities in Tokyo, said Toyota was making all the right decisions in delivering attractive models perfectly timed to consumer tastes.
"The growth highlights the fantastic reputation Toyota has won for its cars," he said. "Toyota may need to set the next goal to keep its motivation up if it becomes No. 1."
Although GM says the perception that its cars are gas-guzzlers is unfair and inaccurate, it is undergoing massive restructuring after racking up 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 like the Camry and Corolla as well as carving out a reputation in hybrids, which use a fine-tuned technology of switching between a gasoline engine and electric motor to save gas.