Toyota Resumes Demand for Price Cuts from Suppliers

Toyota Motor Corp. which hasn't asked its suppliers for price cuts in nearly a year is likely to request discounts between 0.5% and 1%, effective in October, The Nikkei says.

Toyota usually negotiates such discounts twice a year. But it didn't do so for the second half of fiscal 2014-2015, which began last October. The company said at the time it wanted to help its suppliers offset higher energy costs and address a government plea to increase wages.

The Japan Auto Part Industries Assn. reports the country's 82 largest suppliers ended up boosting their consolidated operating profit an average 6% in the last fiscal year. The trade group also says wages in Aichi Prefecture, where many Toyota suppliers are located, rose to a 17-year high.

Toyota is heading for a record 2.8 trillion yen ($23 billion) in consolidated operating profit in the current fiscal year ending March 31. But those results reflect the benefit of a weak yen. The Nikkei says the company wants new price cuts to bolster its competitiveness independent of exchange rate aid.