TOYOTA CITY, Japan -- Japanese supplier Toyota Boshoku Corp. used to coast on its locked-up business making seats for its biggest shareholder and sugar daddy, Toyota Motor Corp.
But when it lost the contract for the latest generation Camry sedan to U.S. rival Johnson Controls, it was a rude awakening.
The lesson was clear to the top brass. Boshoku, the world's 17th-largest supplier according to the Automotive News Data Center, needs to diversify its customer base and globalize.
"It's becoming serious," Executive Vice President Kazuhiko Miyadera said in a July 17 interview at the company's Sanage factory outside Nagoya. "In the past, we just waited for opportunities, for Toyota to give us a chance. We were OK even if we were passive. But now we have to become more active."
Boshoku's new plan: Boost business with non-Toyota customers to 30 percent of total sales, from 3 percent in 2011.
Times have changed. In today's ultracompetitive auto industry, cost is king and traditional supply chains are in flux, even within the long-unwavering Toyota keiretsu, or group of interlocking companies.
Boshoku has supplied seats for the Camry since the nameplate's 1982 debut, Miyadera said. But when the car was redesigned for 2011, Toyota blindsided its longtime partner by picking Johnson Controls Inc. to supply seats for the U.S. version made in Kentucky.
Boshoku still supplies seats to Camrys assembled in Indiana, but that's a sliver of the Camry business.
"It's a big loss for us," Miyadera said. "They want more competitive products -- not only in product appeal but in cost competitiveness. They are serious, and we must be more serious."