Toyota Asks Suppliers to Cut Prices - TheStreet

Toyota Asks Suppliers to Cut Prices

Hoping to narrow its loses, Toyota approaches its suppliers for help in cutting prices.
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NEW YORK (

TheStreet

) -- In a move to pare down operating losses and cope with a strengthening yen,

Toyota

(TM) - Get Report

is asking its suppliers to reduce prices for certain parts by as much as 40%, according to reports.

The cost reductions sought by Toyota are the most substantial in a decade. For the current fiscal year ending March 31, Toyota has forecast a net loss of about $2.2 billion.

Toyota approached suppliers on Monday with the request to slash parts prices by 30% to 40%. The company will use the parts for vehicles available by 2013, reported the

Asahi Daily

, a Japanese newspaper. To cut expenses further, Toyota may also switch to even cheaper parts and materials, according to the

The Nikkei Business Daily

, as well as overhaul its vehicle designs.

Expiring government incentive programs in the U.S. and Japan have also spurred the auto giant to plan for cost-saving measures.

Toyota has given the cost-cutting program a name: RRCI, which stands for "Ryohin (quality), Renka (low price), Costs and Innovation," according to

The Wall Street Journal

.

Also on Tuesday, Toyota unveiled a series of organizational changes in yet another bid to save money and streamline operations. The company plans to consolidate a number of departments and divisions, effective Jan. 1, in order to use its resources more efficiently, it said. No layoffs were announced.

Separately Tuesday, Toyota announced its November sales figures, saying global production increased 22% from a year ago to 719,362 units. Production in Japan rose by 13.5% to 326,893 units, the company said.

November sales in Japan rose 40.3% to 152,189 units, but exports fell 14.4% to 163,585 vehicles.

In morning trading Tuesday, Toyota's New York-listed American depositary shares were gaining 1% to $83.20.

Among other automaker sales,

Honda

(HMC) - Get Report

rose 0.9% to $33.70,

Ford

(F) - Get Report

lost 0.9% to $9.76, and

Daimler

(DAI)

inched higher by 0.3% to $53.10.

-- Reported by Andrea Tse in New York

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