FRANKFURT, Germany—Toyota Motor Corp. is setting industry standards with its fair treatment of suppliers, according to the German rubber industry association WDK.
The automotive major is supporting its suppliers "with billions of euros," WDK said, enabling wage increases and thereby "developing and protecting" its own supply-chain.
The auto maker also has been accepting "justified price increases" from its suppliers since 2022, WDK President Michael Klein said in a May 24 statement.
The concept of "fair cooperation," however, which made German automotive engineering successful in the past, no longer exists in the domestic industry, he added.
"The principle of fairness in contractual matters and in dealing with each other has fallen by the wayside due to the increasingly egocentric maximization of earnings by car manufacturers."
Despite "cost explosions" in energy, freight and raw materials over recent years, suppliers have had "hardly any concessions in delivery obligations to the automotive industry," Klein said.
This makes the Toyota approach "all the more astonishing and significant," he continued, noting how component suppliers have had to absorb these cost burdens.
He warned that car makers are planning to use "massive Chinese overcapacities in the supplier sector to further increase the price pressure on the German supplier industry."
"Since the costs, which are too high by international standards, cannot be passed on in the market, liquidity and equity are melting away," Klein noted.
For many of the companies, "the question arises as to whether Germany is still the right location," he said. "The globally positioned corporations from our midst have already answered the question with 'no.' "
Toyota, however, is showing that a partnership based on cooperation and fairness is sustainable and economical in the long term for everyone involved, Klien said, noting the auto maker is "actually living up to its own advertising slogan: 'Nothing is impossible!' "
