Toyota Motor Corp. (7203)’s main supplier of car seats, Toyota Boshoku Corp. (3116), said the component maker won a new customer in Europe as the company seeks to reduce its reliance on Asia’s largest automaker. The stock rose.
The European company adds to Bayerische Motoren Werke AG (BMW) and Volkswagen AG (VOW) among clients in the region, Boshoku President Shuhei Toyoda said in an interview at the company’s headquarters in Kariya City, Japan today. Toyoda, who’s a relative of Toyota President Akio Toyoda, declined to identify the new customer or specify details.
The move builds on Boshoku’s plans to increase its portion of revenue from non-Toyota customers to about 10 percent by the middle of the decade from about 7 percent now. The Japanese company gained BMW, Daimler AG (DAI) and Volkswagen as clients after last year’s acquisition of the automotive-interior business of Austria’s Polytec Holding AG (PYT) for an undisclosed sum.
“It’s really important for Boshoku and all suppliers not to rely on only Toyota,” said Satoru Takada, a Tokyo-based auto analyst at research firm Toward the Infinite World Inc. “This shouldn’t result in a decrease in the sales volume to Toyota but the company needs to diverse its customer base.”
Boshoku, which tumbled 44 percent in Tokyo trading last year, climbed 3.6 percent to 871 yen today, the highest close in almost seven weeks.
“Competition is very tough in Asia and other regions as well, but we are continuously approaching possible buyers,” Toyoda said.
Toyota Boshoku aims to limit its profit drop to 4.1 percent in the fiscal year ending March 31, targeting net income of 11 billion yen ($143 million). The seat maker expects to profit from its European business by next fiscal year, Toyoda said.
Separately, Toyoda said the parts maker expects a boost in sales thanks to Japanese government subsidies and tax breaks for purchases of fuel-efficient cars.
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