Honda has told suppliers to make price reductions as part of a broader effort to lower costs by more than $9bn over the next four years.

Citing an internal document and unnamed sources, Reuters reported that the Japanese carmaker is targeting savings of Y1.5tn ($9.39bn) by 2030.

The plan was presented this spring when Honda executives gathered with major suppliers at a convention centre in Utsunomiya, near the company’s research and development base.

The number of suppliers present was not disclosed.

According to the documents and sources cited, each supplier was later given its own cost-cutting target.

The step comes as Japanese carmakers face increased competition from Chinese manufacturers, with BYD and other electric vehicle producers expanding in Southeast Asia, Latin America and Europe.

Honda is seeking a 30% reduction in costs across three main component groups: pressed and forged parts, electrical components, and parts related to software-defined vehicles (SDVs).

The documents indicated that achieving that level of reduction would support the competitiveness of Japanese suppliers against Chinese rivals.

The company also told tier-one suppliers to reassess sourcing methods and increase the use of standardised components from second- and third-tier suppliers to manage costs.

Suppliers were also urged to widen their use of Chinese-made parts where possible, while Honda said it would also raise its own sourcing from Chinese suppliers.

According to the report, one source described the targets as "extremely large" and raised doubts about whether they could be met.

A second source said Honda had not signalled before the spring meeting that cuts of that scale would be required, adding that there was now "no room for delay”.

In response to Reuters’ query, a Honda spokesperson declined to comment on specific targets or supplier discussions, but confirmed the company was working with suppliers globally to improve competitiveness and lower costs, including through greater use of standardised parts.

The report follows Honda’s latest earnings.

Operating profit in the fiscal first quarter rose 117.4% year-on-year to Y530.76bn ($3.36bn), as EV-related losses from the previous year did not recur.

Revenue for the three months to 30 June 2026 increased 13.5% to Y6.06tn.

Late last month, Nissan and Honda signed an agreement to jointly develop and standardise electronic control units and software for their next-generation SDVs.