Toyota Motor is pressing suppliers to deliver unusually steep price cuts over the next few years as the Japanese carmaker seeks to reclaim its position as the industry's profit leader.
The world's biggest carmaker told a gathering of suppliers this week that it expects to pay 30 per cent less for many components by the time it rolls out new models for 2013, according to people briefed on the matter. Many of the suppliers are Toyota affiliates, meaning the statement “amounts to an order” to slash prices, one person who deals with the company said.
Toyota followed up yesterday by reorganising its procurement functions, merging three purchasing divisions into two. The move was part of a broader streamlining of management lines since June ordered by Akio Toyoda, chief executive.