Companies

Toyota Plans to Cover Increase in Labor Costs of Parts Suppliers to Secure Talent amid Severe Labor Shortages

AP file photo
A logo of Toyota Motor Corp. at a dealer in Tokyo in May, 2022

The Yomiuri Shimbun

20:54 JST, February 19, 2024

Toyota Motor Corp. plans to cover the increase in labor costs of its parts suppliers from the first half of fiscal 2024, it said Monday.

The aim is to secure human resources throughout its entire supply chain to maintain competitiveness, amid severe labor shortages.

Toyota holds price negotiations with parts suppliers twice a year. While requesting price cuts from parts suppliers through cost-cutting efforts, in fiscal 2022 Toyota began allowing them to charge higher prices to cover the increase in the cost of raw materials including steel, aluminum and resin, as well as utility fees such as electricity and gas.

About 400 parts suppliers will benefit from Toyota’s latest plan.