When Daihatsu Motor Co. launched the Mira e:S minicar in 2011, the Toyota affiliate thought it had found a model for emerging markets. The Mira e:S — e for eco, S for smart — was capable of going 30 kilometers on a liter of gasoline (72 mpg) for a sticker price of just ¥795,000, or $6,637. And indeed, the car was a hit, super-charging Daihatsu's earnings.
A number of improvements — in manufacturing, engineering, procurement — went into the car. But the real secret to success, says Kosuke Shiramizu, Daihatsu's chairman at the time, lay in taking something out of the company's business model: the vaunted keiretsu system.
Shiramizu, now a Daihatsu adviser, says Daihatsu shaved off roughly $1,000 in the manufacturing costs of the car by dismantling its keiretsu — an informal but close interlocking business relationship between a manufacturer and its suppliers, cemented by cross-shareholdings and personnel exchanges.
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