TOYOTA CITY, Japan -- Toyota Motor Corp.'s new global r&d chief endorsed a plan to design cars that can accommodate parts made by overseas suppliers, even if it hurts some of Toyota's traditional keiretsu suppliers.
The plan involves remaking the company's global supply chain to reflect the best of international technology and price competitiveness.
If courting global parts makers drives some Japanese suppliers from the market, so be it. Toyota must do so to stay ahead of increasingly tough rivals, said Mitsuhisa Kato, who was named executive vice president for product development in June.
"Parts suppliers from Japan may be edged from the market, but they can't win unless they have a value-added product," Kato, 59, told Automotive News at Toyota's headquarters here. "Toyota is not just a Japanese company. We have factories all over the world. We need to compete on a global scale."
Kato is pushing to overhaul r&d by maximizing common parts and slashing the number of platforms. Going beyond Toyota's traditional suppliers will help Toyota get the best technology at the most competitive prices, he said.
It is also part of a trend among Japanese automakers to source more parts from outside Japan to offset the foreign exchange hit of the yen's strength against other currencies.
Toyota calls the new focus on shared parts and common designs, unveiled in broad terms in April, the Toyota New Global Architecture. The goal is to reduce development time and shave engineering costs by 30 percent, partly through standardizing half of the 5,000 components that go into a typical Toyota vehicle.
"We need vehicles that have a parts interface that matches global standards and systems," Kato said. "That's where we are going. This is a big turning point for Toyota."
Toyota's old way of r&d limited options on parts, Kato said.
"Up until now at Toyota, when we make a vehicle, we would have our own standards or [Toyota-specific] complicated systems," Kato said. "That has some advantages. But we couldn't accommodate parts, for example, that a European megasupplier makes -- by just bringing those parts over and installing them."
The new approach will standardize auto designs to better match global specifications. Kato did not offer examples, but he said it means Japanese suppliers will have to up their game.
Kato said that head-to-head competition would spur Japanese suppliers to innovate, offer better products and ensure their survival. But the message is sinking in slowly.
"When I talk about this with suppliers in Japan, I really need two hours or more to discuss this over drinking sake," Kato says. "And then they finally get what I'm trying to say."