Toyota's changes mean chances for others
David Sedgwick is a special correspondent for Automotive News.
Toyota's famed keiretsu network of suppliers has begun to crack under the stress of the strong yen.
Mitsuhisa Kato, the automaker's new global r&d chief, this month told Automotive News' Hans Greimel that the automaker will design vehicles that can accommodate parts made by overseas suppliers.
And if Toyota's current suppliers can't compete on price and technology, that's too bad.
Wow. Now, I don't expect behemoths such as Denso, Aisin Seiki or Toyota Boshoku to be driven out of business. But I suspect that Kato means what he says and says what he means.
In April, Toyota unveiled a plan to reduce engineering costs by 30 percent, partly by standardizing half of the parts used in a typical Toyota vehicle.
If so, this could be a very real opportunity for European and North American suppliers.
It also could be an opportunity for other automakers. The auto industry is trying to slash product development costs. One way to do it is to commonize components, as Toyota wants to do.
Over the years, various organizations, including the Society of Automotive Engineers, have helped set industry standards. The pace of this effort could pick up if automakers get serious about it.
One example: the Genivi Alliance is an industry group that is helping to create common software for infotainment systems. Next year, BMW will introduce Genivi software in an unnamed model.
PSA Peugeot Citroen and Jaguar are said to be developing Genivi-based infotainment systems, too.
If the industry's network of suppliers continues to consolidate into a relatively small group of megasuppliers, this trend toward standardized components could pick up speed.
For instance, one can visualize automakers adopting a common standard for EV batteries to accommodate suppliers such as LG Chem, Bosch or Panasonic.
But wouldn't this lead to generic, look-alike, drive-alike cars? Probably not. If automakers produce generic cars, they can compete only on the basis of price. And no one is willing to settle for that.
You can reach David Sedgwick at firstname.lastname@example.org.