Toyota to design vehicles that use parts from overseas suppliers

Article by Anita Panait, on September 18, 2012

Toyota Motor Corp. will be designing vehicles that can contain components manufactured by suppliers outside Japan. This was disclosed by Mitsuhisa Kato, Toyotas new global r&d chief, to Automotive News. Up until now, Toyota has been acquiring components for its vehicle from its keiretsu network of suppliers.

But the effects of the strong yen on profits may have forced Toyota to reconsider that supply approach as it is now willing to accommodate overseas suppliers. That would be more apparent if Toyota's current suppliers, including car parts giants Denso, Aisin Seiki and Toyota Boshoku, cannot compete on technology and price.

Kato’s statement is consistent with a plan unveiled by Toyota in April 2012, which entails cutting engineering costs by 30 percent partly by standardizing half of the components used in a typical Toyota vehicle.

Kato’s statement could also be seen a good opportunity for parts suppliers based in Europe and North America. The auto industry is currently looking for ways to reduce product development costs and one of them is to commonize vehicle components, just like what Toyota is planning.

Standardizing has been the name of the game for industries who want to save on costs. Same results could be achieved by the auto industry only if carmakers get serious about doing it on a faster pace.

Auto manufacturers could be bound to save on costs if they used standardized components, as they do not have spend a large amount of money just trying to come up with something unique but costly. For instance, BMW will be using infotainment systems software by the Genivi Alliance. PSA Peugeot/Citroen and Jaguar are said to be developing infotainment systems based on the Genivi software.

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