Toyota to cut auto parts costs by 30 percent

[Bluestream]

Originally Posted By: Steve S
I went to the Toyota dealer to buy parts for a Brake job and when the parts guy gave me the paperwork to pay there was only the list price on the paperwork. I asked why no discount and he said we do not do that so he kept the parts and I went elsewhere .


Do you mean you had a trade account and they gave no discount, or you were a retail buyer looking to get a discount?

 

[KrisZ]

Originally Posted By: unDummy
There can be a drop in price if they get rid of all the useless options and return to less bloated vehicles.

Also, there is plenty of waste in manufacturing. Forcing cost reduction requires some engineering, planning, and thinking. Doesn't always mean quality suffers or off-shoring to commieland.

When you have growth and sales, you don't always 'build' with the most efficiency. Now that volume has decreased, they can look back over their shoulders and cut all the waste.




There is a cheap Toyota car that you are describing, the Yaris, it's as basic as a car can get these days and look at the dismal sales figures in US, in Canada it does somewhat better, but we have more expensive fuel. People will not simply go back to the "good ald days" with crank windows, no A/C, ipod connections etc. especially when you have Korean cars offering all these features at much less cost.

Also, Toyota has been implementing Lean Manufacturing for decades and asking to lose extra 30% is like asking an anorexic person to lose 30lb of weight, you can't do it without repercussions either to the quality of the product or profitability of the company, so guess which way a corporation like this will go... cheapen the parts and outsource as much as possible.

 

[01rangerxl]

Toyota seems to be learning the most important lesson of the auto industry lately...it really sucks to be #1.

If they are not careful about this, they could be trying to fix it for decades. A lot of people buy Toyotas just because "it's a Toyota," but that is not going to last if consumers start to notice cheap materials and parts.

 

[Ursae_Majoris]

Originally Posted By: KrisZ
Also, Toyota has been implementing Lean Manufacturing for decades and asking to lose extra 30% is like asking an anorexic person to lose 30lb of weight, you can't do it without repercussions either to the quality of the product or profitability of the company, so guess which way a corporation like this will go... cheapen the parts and outsource as much as possible.


I agree a 100%. Like i said, paper board interior is next.

 

[GMBoy]

Someone above stated that there is always some fat/waste in the manufacturing part of producing a car. I can tell you for fact that there is NO meat left to cut on the production floor and that's why manufacturers always try to cut part costs. Cutting parts costs is easier because you're passing the pain on to the supplier. Suppliers are really treated poorly. They create wonderful parts and a lot of times bear the R&D costs for these latest and greatest gadgets buyers love. Asking them to cost costs is a hard pill to swallow. True - some older designs can be price cut due to the cost to invest and tooling being paid for but even older parts - a 30% cut is drastic. I do not see any suppliers being able to cut much more than 5-10% max in my opinion.

 

[GMBoy]

Originally Posted By: pbm
Toyota seems to be following the business model that drove GM to bankruptcy.


I agree. There was a time when suppliers threatened to walk out on GM because Toyota was treating them better. Looks like it's a level playing field now with everyone wanting to cut costs at every corner. The consumer may or may not see all these price reductions in the final product. Either the supplier lowers the price or the OEM decides to decontent a part. For example, you may have a nice rubber insert at the bottom of your console cup holder - to shave costs they may eliminate that nice rubber insert. Unless a customer saw an older version with it, he/she may never notice. Then, there are more serious cost reductions such as eliminating a fastener or maybe some velcro strips. Eliminating a fastener or velcro strip may allow squeaks and rattles later on. Just some examples.

 

[LS2JSTS]

Speaking of rubber inserts. They took them out of my new HHR. The door handles dont have rubber inserts at the bottom, but I've seen 2008's and even 2009's that did have them. I was thinking they were just missing, but maybe I've been "de-contented"...lol

 

[GMBoy]

Speaking of decontenting - it's still going on strong. And car makers are getting real nifty too. For example - my 2008 Cadillac CTS I love the night lighting (mood lights). They run across the dash just below the wood, in the doors, the door pulls and floor lighting (frt&rr), ect. Looks great! Well - guess what? 2010 models no longer have the lights that illuminate the floor front and back. Sure the option package price is the same or more! But you can buy the "add on lighting package" to light the floors from the dealer to put in your car at additional cost. That's a money maker there!

 

[bdcardinal]

Originally Posted By: Bluestream
Originally Posted By: Steve S
I went to the Toyota dealer to buy parts for a Brake job and when the parts guy gave me the paperwork to pay there was only the list price on the paperwork. I asked why no discount and he said we do not do that so he kept the parts and I went elsewhere .


Do you mean you had a trade account and they gave no discount, or you were a retail buyer looking to get a discount?


+1, i dont understand why people expect a discount just because they are a breathing customer at a parts counter, do people do the same thing when they go to Home Depot or WalMart?

 

[rshunter]

Originally Posted By: Ursae_Majoris
Originally Posted By: KrisZ
Also, Toyota has been implementing Lean Manufacturing for decades and asking to lose extra 30% is like asking an anorexic person to lose 30lb of weight, you can't do it without repercussions either to the quality of the product or profitability of the company, so guess which way a corporation like this will go... cheapen the parts and outsource as much as possible.


I agree a 100%. Like i said, paper board interior is next.

It's not next, it's already here. One of my trade journals recently had an article about the use of natural-fiber materials to reduce interior trim costs. Take a wild guess at the name of the big auto manufacturer that was advancing this...

 

[rshunter]

Originally Posted By: GMBoy
Originally Posted By: pbm
Toyota seems to be following the business model that drove GM to bankruptcy.


I agree. There was a time when suppliers threatened to walk out on GM because Toyota was treating them better. Looks like it's a level playing field now with everyone wanting to cut costs at every corner. The consumer may or may not see all these price reductions in the final product. Either the supplier lowers the price or the OEM decides to decontent a part. For example, you may have a nice rubber insert at the bottom of your console cup holder - to shave costs they may eliminate that nice rubber insert. Unless a customer saw an older version with it, he/she may never notice. Then, there are more serious cost reductions such as eliminating a fastener or maybe some velcro strips. Eliminating a fastener or velcro strip may allow squeaks and rattles later on. Just some examples.

I don't recall the specific numbers, but Nissan was able to save a staggering amount of money by simply no longer painting their metal ashtray liners.

 

[eljefino]

Originally Posted By: KrisZ

There is a cheap Toyota car that you are describing, the Yaris, it's as basic as a car can get these days and look at the dismal sales figures in US, in Canada it does somewhat better, but we have more expensive fuel. People will not simply go back to the "good ald days" with crank windows, no A/C, ipod connections etc. especially when you have Korean cars offering all these features at much less cost.



I know a guy who wanted crank windows and cruise control, they could not sell him one without the other. So he got neither and put in aftermarket cruise. One would think the customer was always right but many $1000 "convenience packages" are a turnoff.

That original post mentioned "emerging markets". I will assume China. There's a reasonable trend of assembling vehicles in the country in which one expects to sell them. May not start making engines from scratch, instead "sharing" with a 1st world country. Sometimes you'll notice provisions for an unneeded distributor drive or mechanical fuel pump on a camshaft and wonder what it's doing there, it's for the world market.

The natural evolution of things is that receiving market will make increasingly complex stuff that trickles into the rest of the world's supply chain. They'll probably start with low tech castings etc (cheap labor and lax enviro laws) that probably could have 30% shaved. Industrializing takes a fairly preplanned path... start with making clothes, move up. Within the auto sector they probably also have this figured out.

 

[brianl703]

Originally Posted By: bdcardinal

+1, i dont understand why people expect a discount just because they are a breathing customer at a parts counter, do people do the same thing when they go to Home Depot or WalMart?


Do you pay list price (or more) at Home Depot or WalMart?

 

[bdcardinal]

i just pay whatever they want me to pay, if i have a coupon i use that. i dont go up to the cashier and say "i need a discount because i am here and dont want to pay your list price."

 

[benjamming]

Originally Posted By: Bill in Utah
The paint on my 2005 is really the only thing on my Toyota that I'm not happy with.

If I drive by a sand pit the paint falls off. I've got at LEAST 1000 rock chips ALL OVER the car. Not just the hood, roof and fenders but on the sides and trunk lid.

Weakest paint I've even seen.

Thank the EPA for the "improved" paint..

The rest of the car I'm impressed with and just passing 157k it still feels like its brand new.

But it will get a repaint in a few years.

Bill


Remember, Bill, that all auto paint is subject to the same EPA rules so don't blame the EPA for the poor quality from one mfg when many other mfg have figured it out & don't have the same problems or to the same extent. (Blame the EPA for the rule in the 1st place - I would agree.)

 

[Bill in Utah]

Originally Posted By: benjamming


Remember, Bill, that all auto paint is subject to the same EPA rules so don't blame the EPA for the poor quality from one mfg when many other mfg have figured it out & don't have the same problems or to the same extent. (Blame the EPA for the rule in the 1st place - I would agree.)


Notice that I also called out Ford and Dodge in a post after the one you quoted.

At least the primer coat is good to prevent rust on those chips on the Toyota.

Take care, bill

 

[PT1]

Originally Posted By: tenderloin

Toyota has asked its suppliers to cut prices of some parts by 30-40 percent for cars that will hit the market by 2013, the Asahi daily said. The Nikkei business daily also said Toyota plans to switch to less expensive materials and parts.



Translation: ATTENTION CAR BUYERS: DO NOT BUY A 2013 TOYOTA

 

[brianl703]

Originally Posted By: bdcardinal
i just pay whatever they want me to pay, if i have a coupon i use that. i dont go up to the cashier and say "i need a discount because i am here and dont want to pay your list price."


I just bought a part at one of the Ford dealers around here for my 88 Mustang GT (driver's door latch assembly). The parts guy gave me a $10 discount off list (making my cost $43) and I didn't even ask.

Guess where I'm probably going to go for Ford parts again? Especially since they were the ONLY dealer around who had it in stock.

In stock and cheaper than list.

Impressive.

 

[cousincletus]

From what I have experienced, import parts in general cost at least double than the Chevy dealer charges. Sometimes up to 5X more. There are exceptions, but that's what initially got me started buying GMs years ago. They have the most available, cheapest parts in the business. Now, what Toyota pays the suppliers is another story. It's probably close to what any other mfg pays.

 

[cousincletus]

Originally Posted By: pbm
Toyota seems to be following the business model that drove GM to bankruptcy.


Trucks and SUVs got GM where they are now. They were doing well selling people quality products they wanted, but when gas prices spiked, sales fell off.