• Kyodo

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Three car-parts makers affiliated with Toyota Motor Corp. will merge in 2004 to bolster product development and price competitiveness, sources said Wednesday.

The three firms — Toyoda Boshoku Corp., Araco Corp. and Takanichi Co. — hope the merger will enable them to be more competitive with major parts makers in the United States and Europe, the sources said.

Araco ranks first in the car-seat product market in Japan, followed by Takanichi. Toyoda Boshoku has expertise in automobile interior parts. Their combined auto-parts sales total some 400 billion yen per year.

Under the plan, Toyoda Boshoku is expected to be the surviving company, the sources said.

Araco will transfer its production lines for four-wheel-drive vehicles and small buses, which are currently being produced for Toyota, to another Toyota-affiliated manufacturer, they said.

Toyota plans to increase local production in the U.S., Europe and Asia, and is encouraging its affiliated parts makers to reorganize so they can also engage fully in local production abroad, the sources said.