TOKYO -- For all their size and success, Japanese auto suppliers that rocketed to global dominance on the coattails of their No. 1 customer, Toyota Motor Corp., face a perilous new reality.
Pressured by a shrinking home market and a sugar daddy looking further afield, Toyota-affiliated suppliers such as Denso and Aisin Seiki are racing to diversify their customer bases or risk decline.
And it's not just Toyota parts makers.
Across the board, Japanese suppliers are struggling to adjust to a new business reality that threatens to undermine the country's keiretsu system of tightknit cooperation between carmakers and their favorite-son suppliers.
Blame the unraveling on an immutable truth: Japan's carmakers have stopped expanding at home. Now, they are channeling new investment into overseas assembly plants, and Japanese suppliers that want a piece of the action are obliged to do the same.
But not all Japanese suppliers are big enough to do so. And those that are, even giant, longtime Toyota suppliers, bump against a harsh reality that sales are anything but guaranteed.
"In Japan, we can rely on Toyota very much. But if it's outside of Japan, except for maybe Indonesia or Thailand, Toyota's market share is still quite low and not so stable," says Tadashi Arashima, president of Toyoda Gosei Co., a Toyota-affiliated supplier that makes hourglass-shaped grilles for Lexus as well as steering wheels, airbags and sealing and interior components.
"We have to have a broader customer base."