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Cut costs Toyota asks suppliers to lower prices
Jul 29,2020 20:01CST
translation
The content below was translated by Tencent automatically for reference.

SMM: it is reported that Toyota will further start its cost-cutting plan. At the same time, in view of the further spread of the epidemic and the decline in raw material procurement costs and other reasons, Toyota asked some parts manufacturers to reduce the price of parts supply.

At present, Toyota has put forward price reduction requirements to engine and other parts suppliers through documents and other means. Previously, Toyota adjusted prices with parts suppliers twice a year (April and October), but it was rare for Toyota to ask for a price cut halfway. The data show that Toyota has deals with about 40,000 companies, and the price cut is likely to have an impact on the earnings of a wide range of manufacturing companies.

Toyota believes that the price of raw materials such as spare parts for engines and driving positions, such as some special steel, has fallen by about 7,000 yen per ton compared with the second half of 2019 (October 2019-March 2020). Therefore, Toyota requires the use of corresponding special steel parts to reduce prices.

In addition, Toyota is also worried that the deterioration of the operation of various parts companies will lead to disruption of the supply chain, and has proposed that even the same parts will not set a uniform purchase price, but will be decided through negotiations with individual companies.

In fact, affected by the epidemic, Toyota's own sales fell seriously. In May 2020, Toyota sold 577000 new cars worldwide, down 31.8% from a year earlier. Its cumulative sales from January to May were 3.065 million, down 22.3% from a year earlier.

On July 21, Toyota decided to continue to cut production until August, taking into account the risk of a recurrence of the epidemic and the impact of falling demand in the global car market. Production at its Japanese plant will be about 3% lower than originally planned.

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