Toyota presses parts makers for 30% cut in costs

NAGOYA (Kyodo) Toyota Motor Corp. has notified affiliated parts manufacturers that it plans to cut procurement costs for auto parts by a combined 30 percent by 2013, sources said Tuesday.

The move, aimed at marketing new car models in Japan and abroad at lower prices, would benefit people intending to buy new vehicles but is expected to weigh on the operations of Toyota’s subcontractors and sub-subcontractors.

The plan involves seeking cost reductions on a wide range of auto parts — including those for the undercarriage, engine and electrical devices — for all new models. Toyota is hoping to achieve an overall 30 percent cut in auto part prices through negotiations with the manufacturers on the price and specifications of each part, they said.

While sales have recovered in Japan this year due to the effects of government incentives, Toyota has determined that it could boost demand if car prices are lowered by ¥200,000 to ¥300,000.