Toyota's Still Driving Itself

It's recently motored past Ford (NYSE: F) and pulled even with General Motors (NYSE: GM). And it's unlikely it will ever be threatened for size supremacy by Honda (NYSE: HMC) or Daimler AG (NYSE: DAI), or even India's ascendant Tata Motors (NYSE: TTM). But Toyota (NYSE: TM) still isn't letting any grass grow under its tires.

Indeed, the company has just rolled out its remodeled Crown sedan. Never heard of a Toyota Crown? It's a relatively upscale entry into the auto world that the company has produced for a number of years, but which it's sold largely in Japan and China -- often for taxicab use.

But the latest version is the product of a new cost-cutting strategy that Toyota management hopes will save it about $2.8 billion a year. And perhaps as importantly, it'll foster the inclusion of increased stability and safety. An example of the safety innovations includes an optional safety device in the Crown that tracks the amount of time a driver's eyes remain closed and then sets off an alarm if the elapsed time exceeds a norm.

The strategy, which the company calls Value Innovation, or VI, involves the inclusion of thousands of car components to form a smaller number of modules and systems. For instance, automobiles contain numerous electronic control units (ECUs), which are essentially mini-computers that control an array of functions, from acceleration to braking, and on to windshield wiper operations. According to management, through the use of the VI approach, the number of ECUs -- and consequently related production costs -- has been reduced dramatically.

And as I've recently described to my Foolish friends, Toyota is working -- admittedly apace with others -- on the development of a plug-in car. Promised for at least limited rollout in about three years, the car would permit most folks to commute to and from work without ever starting the internal combustion portion of their engines. As such, it would go far toward dealing with the demand side of our lopsided energy equation.

All this perhaps leads to the conclusion that, while Toyota may not be the only way to seek fun and profits from the automotive sector, it just may be the best way.

For related Foolishness:

• Worst Stock for 2008: General Motors
• Ford's Lost Luxury
• Cerberus Gets the Nod From Daimler