Toyota to Consolidate Electronics Operations with Denso

June 01, 2018 at 10:25 AM

Toyota Motor Corp. plans to merge its electronics operations within supplier affiliate Denso Corp. over the next four years.

Toyota owns 24% of Denso and is the supplier’s largest customer.

The consolidation plan calls for Denso to take charge of production and development of Toyota’s core electronics components by 2019 and 2022, respectively. Such activities currently are performed by both companies.

The consolidation is expected to help speed the commercialization process of advanced electronics, better utilize Denso’s expertise in the area and reduce costs by minimizing the redundant allocation of resources. Toyota says the move was prompted by the rapid emergence of automation, electrification and connectivity technologies in new vehicles.

The companies have begun talks to determine how to implement the strategy. One of the goals is to transfer the production of electronic components at Toyota’s Hirose, Japan, plant to Denso by the end of next year.