Toyota Motor Corp. is looking to beef up its home-building business by focusing on energy efficiency.
The centerpiece of its strategy is its new energy management system, which lets residents better control their electricity consumption, in their houses and when charging electric cars.
At a press conference on Tuesday, Toyota Senior Managing Director Nobuyuki Kodaira unveiled the energy management system, saying it was Toyota's answer to the problem of global warming. The carmaker is "responding to the environmental challenge by linking Toyota's car- and house-making businesses," he said.
The system, called Toyota Smart Center, tracks home power consumption, including any plug-in hybrid or electric cars being recharged. The system can help households reduce their carbon dioxide emissions by 75%, according to a Toyota executive. The company plans to bring the system to market in 2012.
Japan's largest carmaker is hoping its green technologies boost the sales of Toyota Housing Corp., its home-building subsidiary.
All in the family
Toyota Housing President Senta Morioka, who was also at Tuesday's press conference, said the energy management technology will help his company compete with bigger rivals.
Toyota recently integrated its home building operations within Toyota Housing. By bringing Toyota's housing manufacturing, marketing and technology development under one roof, Toyota Housing has become a full-fledged home builder.
- Toyota unveils its newly developed household energy management system, which is expected to hit the market in 2012.
Toyota Housing has also become the leading shareholder of Misawa Homes Co. holding a 27.8% stake in the firm.
Toyota's housing business is a legacy of the founding family, and the automaker's effort to bolster the unit has shifted into a higher gear since Akio Toyoda, a member of the family, took the helm last year.
The business dates back to the era of Toyoda's grandfather, Kiichiro, who virtually founded the automaker and began building concrete houses in a quest to provide fire-resistant housing to Japanese home-buyers.
In 1975, Shoichiro Toyoda, Akio's father, led Toyota's entry into the home-building market by setting up a housing division within the company.
Looking for a spark
The new age of smart grids and electric cars offers Toyota an opportunity to find synergies between its vehicle and home-building businesses. The commitment of the Toyota group to the effort is underscored by the stakes that nine group companies, including Denso Corp, Toyota Industries Corp and Aisin Seiki Co, have acquired in Toyota Housing. On Oct. 1, they bought a combined 12% of the unit.
After many years of struggling to increase its presence in the market, Toyota Housing definitely needs the support.
With annual sales of slightly more than 4,000 detached houses, Toyota Housing is not among the biggest players in the industry. Sekisui House Ltd, the nation's No. 1 home-builder, sells 15,000 units per year.
The outlook for the market is harsh, with new housing starts in the year through March at a 45-year low. Fewer children and an aging population spell trouble for the industry.
Toyota Housing President Morioka believes the reorganization will speed up the company's decision-making. But the move to combine manufacturing and marketing is hardly revolutionary.
Rivals appear unconcerned about a challenge from Toyota. Toyota Housing certainly has ample management talent, but the firm is not yet a formidable competitor in terms of sales muscle or product quality, said a senior executive at a major home-builder.
In order to grab business from bigger rivals, Toyota Housing is trying to emulate Misawa Homes. Toyota Housing Chairman Teiji Tachibana, who also serves as Misawa's chairman, is pushing the unit's executives to gain marketing and technological expertise from Misawa. Backed by the firepower of the Toyota group, Toyota Housing has a shot at becoming a serious challenger to the market leaders, analysts say.
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