Toyota, steelmakers in talks over steel cost cuts
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TOKYO, Oct 1 (Reuters) - Toyota Motor Corp (7203.T) and five Japanese steelmakers are trying to cut steel procurement costs to cope with rising raw material and oil prices and slowing global car sales.
The companies aim to raise productivity by about 3 percent by implementing measures such as using cheaper steel plate, reducing the number of products and unifying specifications, Toyota said.
"The rise in prices of steel and other raw materials is no longer an issue that we can tackle on our own," a Toyota spokesman said. "We aim to stabilise the price in the mid- to long run by jointly working on rationalisation efforts."
Soaring raw material prices are pressuring steelmakers to pass costs to their clients. Toyota and other automakers are facing a more than 30 percent hike in sheet steel prices this business year.
A downturn in the U.S. market is also hurting automakers and forced Toyota to cut its 2008 and 2009 global vehicle sales forecasts in a rare setback for the world's biggest automaker.
Toyota and steelmakers -- Nippon Steel Corp (5401.T), JFE Holdings (5411.T), Sumitomo Metal Industries Ltd (5405.T), Kobe Steel Ltd (5406.T) and Nisshin Steel Co (5407.T) -- are planning to take about 100 different measures to lower costs, the spokesman said.
Toyota buys 4 million tonnes of steel a year in the domestic market for about 400 billion yen ($3.76 billion), according to the Nikkei business daily. (Reporting by Sachi Izumi; editing by Sophie Hardach)
