Toyota Motor has notified affiliated parts manufacturers about its plan to cut procurement costs for auto parts by a combined 30% by 2013, sources close to the situation said on Tuesday.
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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, Kyodo News said.
Toyota’s plan involves seeking cost reductions on a wide range of auto parts for all new car models to be released in the future, the sources said.
The Japanese automaker is hoping to achieve an overall 30% cut in auto part prices through negotiations with the manufacturers on the price and specifications for each part, they said.
As sales of automobiles have recovered in Japan this year due to the effects of government preferential treatment schemes such as subsidies for the purchase of energy-efficient cars, Toyota has determined that it could boost demand if car prices are lowered by JPY200,000 to JPY300,000.
Demand for low-priced cars has also been increasing in emerging economies such as China and India.
But auto parts makers have already been complaining that Toyota is exerting strong pressure for price reductions.
