Toyota is planning to make JPY300bn (EUR1.8bn) in annual cost savings from next year.

Toyota president Katsuaki Watanabe told Reuters the company expects to exceed cost savings made under previous plans. Cost savings are expected to grow in line with the increase in sales, he said.

Toyota's latest cost-saving plan is called VI, for Value Innovation and hinges on a modules and systems strategy. The Crown sedan due early  in 2008 is the first car to be introduced using the new strategy.
The VI plan succeeded the CCC21 plan (Construction of Cost Competitiveness in the 21st Century), which was led by Watanabe when he was head of purchasing.

Watanabe said the full impact of the plan would probably be seen around 2010. By then he would expect a new scheme to replace the current VI plan. "By then we'd be looking at the car's design as a whole, for example by using lightweight materials," Watanabe told Reuters.

The cost-cutting programme is part of Toyota's target to reach a 10% operating margin. In the last financial year it had a 9.3% margin.