According to the Nikkei – biggest financial newspaper in the world – Toyota Motors Co. is planning to ask its suppliers to cut prices for the first time in a year in order to increase competitiveness.
The Japanese carmaker has already begun talking to suppliers with a proposal to cut prices from 0.5% to a bit less than 1% for a number of six months starting October this year. The Japanese newspaper preferred to not release the source of the information gathered.
Toyota has previously refrained from asking for smaller prices in the second half of the fiscal year of 2014 in two different rounds in order to help auto parts manufacturers not feel the impact of rising waged and the costs of raw materials. Nikkei added that a recent decrease in raw material costs is what allowed suppliers to cut costs and what would enable them to approve Toyota’s request.
The daily newspaper also said that Toyota’s steel-sheet suppliers have already agreed to reduce their prices by 6% or $48 per ton from April this year up to September as prices for iron ore and coal went down. Toyota spokeswoman Atsuko Watanabe refused to comment on the Nikkei information.
Toyota is at the moment caught up in the Tianjin chemical explosion situation, where it decided to keep it operations shut down for at least by the end of the week. Near the Chinese port of Tianjin where Toyota is handling its current operations a deadly chemical blast took place last week, leaving the carmaker unable to confirm the safety of the area close to the blast and making the better call of keeping the production temporarily offline.
By Gabriela Florea