Reports in Japan say that Toyota is to ease price cut demands pressure on its suppliers this year.
The Nikkei news agency reported that the move is aimed at helping hard-pressed suppliers who do most of their business in Japan and benefit less from exports.
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The Nikkei report said that the six-monthly Toyota price cuts demanded from its suppliers are typically around 1%, with the automaker looking for efficiency gains from its supplier network. The price cuts demanded rose to 3% in 2011 and 2012, when the yen was strong and the company faced financial difficulties.
According to Nikkei, Toyota will ask its suppliers for a cut of less than 1% for the first half of next fiscal year. In part, it’s a reward to suppliers who have met the tough demands of recent years.
Toyota is expected to log a group operating profit of 2.4 trillion yen this fiscal year, surpassing its fiscal 2007 record.
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By GlobalData
