Though the rapid rise of labour costs in China is “inevitable”, Toyota Motor has no immediate plans to review its supply chain there, its vice president said.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Production at Toyota’s assembly plant in southern China had to be suspended last month after a strike at an affiliated auto parts supplier in the country, one of many that have affected auto suppliers and consumer electronics plants.
The unrest has sparked fears that the days of cheap Chinese labour could soon be over for foreign investors forced to offer pay rises to placate workers – and for consumers accustomed to inexpensive goods.
However, Toyota’s Atsushi Niimi told AFP he saw current events as a natural stage in China’s economic evolution.
“Japan had a period when (the government) sought to double incomes in the 1960s. At that time, strikes occurred frequently in Japan,” he said.
“It’s better for us to seek solutions by dialogue with employees, but before we are able to do this strikes occur. In a sense, it’s inevitable.
“If we change our suppliers, it would not provide a fundamental solution. What’s important is how well we communicate with employees.”
Niimi said building more production capacity in emerging markets was key.
Despite the yen’s current strength, the company said it was not considering importing vehicles to Japan from its lower-cost plants overseas but would instead focus on making domestic plants more cost-effective.
“I believe there are still many things we can do to innovate ways of manufacturing in Japan,” he said.
“As Toyota is based in Japan,… we think it’s important to keep our competitiveness in manufacturing in Japan,” he said.
