ABSTRACT
In terms of worldwide production, Tokyo Motor Works, Ltd. (TMW) was by 1990 one of the world's top ten automobile manufacturers. In 1990, TMW produced just over 2 million vehicles, supplying approximately 4% of the world's demand for cars and trucks. TMW had developed a formal procedure to introduce new products. One of the major elements of this procedure was a sophisticated target costing system that relied heavily upon consumer analysis. Cost planning at TMW was primarily a program to reduce product costs at the design stage. TMW first set its cost planning goals and then set out to achieve those goals through aggressive design changes. Once the performance specifications and the cost reduction targets were distributed to the design division, value engineering began. The designers' top priority was to create high-quality, high-performance products that satisfied the customer. At the same time, they were expected to attain their cost targets.
