Toyota Motor and its main supplier Denso have agreed to begin considerations toward consolidating the core electronic component operations of both Toyota and Denso within Denso.
Currently, advanced development and mass-production development for Toyota’s electronic components, as well as the production of such components, are conducted by both Toyota and Denso.
The considerations to be made under today’s agreement are to focus on consolidating mass-production development and production within Denso.
In the automotive industry, advances in technologies related to electrification, automated driving, and connectivity are accelerating.
With the growing application of electronic control of various vehicle components, the importance of electronic component operations is expected to increase further.
Denso has long independently developed and mass-produced semiconductors for onboard automotive applications, and it develops and produces various electronic components around the world.
By consolidating mass-production development and production of electronic components of both Toyota and Denso within Denso, which has a high level of expertise in the field, Toyota and Denso aim to establish a speedy and competitive development and production structure.
Doing so also aims to maximize resource utilization, such as by shifting resources created by eliminating duplicate operations within the Toyota Group to new domains that will increase the value of future mobility, thus strengthening the competitiveness of the Toyota Group overall.
The two specific points of the agreement are outlined below and the two companies are planning to decide the details in the forthcoming months.
Transfer of production operations for electronic components
Discussions are to be held toward the transfer of production of electronic components from Toyota’s Hirose Plant to Denso prospectively at the end of 2019.
By strategically revamping its production and supply structure for electronic components, Denso aims to be a winner in the global competition of the electronic component market, as well as be able to apply the merits of mass production for supplying Toyota with higher-quality and more affordable electronic components.
Consolidation of mass-production development functions for electronic components
From 2022, mass-production functions for electronic components are to be consolidated within Denso.
Considerations, such as for integrating development locations currently dispersed between Toyota and Denso, are to be made to enable the Toyota Group to establish a new organizational structure that unites operations ranging from development to production, leading to accelerated development speed.