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 |  Oct 07 2011, 4:15 PM

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Toyota‘s rush to cut costs amid a rising yen is leading them towards a confrontation with parts suppliers, with the automaker demanding that Japanese parts makers slash costs or face being replaced with overseas companies.

Toyota is still reeling from lost production during March’s tsunami and earthquake, and is estimated to lose $443 million for every 1 yen appreciation against the U.S. dollar. Automotive News reports Toyota telling suppliers that it would source parts from emerging markets if Japanese parts companies like Denso and Aisin fail to provide Toyota with agreeable terms.

Nissan CEO Carlos Ghosn warned of severe economic consequences should the Japanese government fail to take adequate action against the yen’s rapid rise.

[Source: Automotive News]