Honda wants suppliers to make “extremely large” cost cuts as it targets more than $9 billion in savings by 2030.
The automaker is encouraging suppliers to use more Chinese-made parts and source standardized components from lower-tier suppliers.
Honda is under growing pressure from Chinese automakers as it struggles with EV losses and shifts its focus back toward hybrids.
Honda is putting its suppliers under serious pressure as the Japanese automaker looks for ways to slash costs and fight back against increasingly competitive Chinese carmakers. According to internal documents seen by Reuters, Honda wants to cut almost $10 billion in costs until the end of the decade. As part of that effort to drastically tighten the belt, suppliers have reportedly been told to make what one source described as “extremely large” cost reductions.
The ambitious target calls for roughly 1.5 trillion yen (nearly $9.6 billion at current exchange rates) in savings by 2030. Honda has apparently broken down the cost-cutting exercise into several areas, asking suppliers to reduce prices by as much as 30 percent for pressed and forged components, electrical parts, and hardware associated with software-defined vehicles.
