Reports in Japan say that Toyota is pressurising key suppliers to improve productivity and restructure where necessary to become more competitive.

Former Toyota executive Yasumori Ihara was appointed President of Aisin Seiki last month and has initiated a comprehensive review of the company's operations. Reports say that the review will produce recommendations for restructuring its wide-ranging manufacturing operations before the end of the year. Aisin Seiki is Toyota's second biggest supplier.

Prior to taking the role of President, Yasumori Ihara worked as an adviser for Aisin and embarked on a world tour of the company's facilities. In subsequent remarks reported in the Japanese media, he has hinted that more restructuring will be necessary and that Toyota is keeping a close eye on developments.

Analysts say that Toyota is concerned that its main suppliers have been cushioned from some of the business forces that have increased the competitiveness of other major automotive suppliers around the world. Under Japanese business practices, many supplier companies have been subject to cross-shareholdings and guaranteed supply arrangements under the 'keiretsu' system.