Toyota Motor Corp., Asia’s biggest carmaker, is telling parts suppliers in Japan to slash prices or face being replaced by overseas rivals as the yen’s value appreciates, four people involved with the discussions said.

Toyota, which loses 34 billion yen ($443 million) in operating profit for every 1 yen appreciation against the dollar, told parts makers it intends to increase procurement in emerging markets in cases where domestic suppliers can’t match overseas prices, according to the people, who declined to be identified because the talks are private, according to The Detroit News.

Parts-making affiliate Toyota Boshoku Corp. led declines among the automakers’ suppliers in Tokyo trading, dropping 5.8 percent to its lowest close since March 2009.

Toyota seeks to cut costs to compensate for the yen’s climb as it restores output in Japan after the March 11 earthquake and tsunami damaged factories and caused parts and power shortages.

Toyota officials in North America declined to comment on any discussions with suppliers regarding cost.

The issue is especially pressing in Japan, where the yen’s appreciation against other currencies has eroded the profitability of Japanese vehicle exports.

“The high yen must be pressuring Toyota to review its supply chain and to seek cheaper options,” Hiroshi Ataku, an analyst at IHS automotive in Tokyo said.

Carlos Ghosn, chief executive officer of Toyota’s biggest domestic rival Nissan Motor Co., said Thursday that Japan faces a “hollowing out” of its industries should the government fail to take steps to counter the yen’s rise.

Toyota made the demand to its 219 largest domestic suppliers, including Denso Corp. and Aisin Seiki Co., at a meeting held at the end of August in Nagano prefecture, the people said.

Denso Corp. dropped 3.4 percent to 2,249 yen at the 3 p.m. close on the Tokyo Stock Exchange, the lowest since Aug. 24. The benchmark Nikkei 225 Stock Average rose 1 percent.

Toyota spokeswoman Amiko Tomita in Tokyo declined to comment on the automaker’s discussions with partsmakers about prices.

Nissan’s Ghosn, after taking over as president of the Japanese automaker in 2000, slashed the number of domestic suppliers to cut costs and restore the automaker to profit. That recovery is now threatened by the Japanese currency’s sharp rise, Ghosn has said.

The yen strengthened to a postwar record 75.95 yen versus the dollar in August and has averaged about 80 yen in the fiscal year started April 1, compared with almost 90 yen in the same period a year earlier.

Toyota has committed to manufacturing at least 3 million vehicles a year in Japan and has “naturally” favored its affiliated domestic parts suppliers, Ataku of IHS said.

“Toyota may have to follow what Ghosn did with Nissan’s parts supply chain 10 years ago, and search for the cheapest possible options,” he said.

Japan-based suppliers should procure more parts from overseas as one way to reduce their prices, Toyota said, according to the people involved in the discussions. The company requested to reduce prices by as much as half to some of its suppliers, according to one of the people.

The automaker, based in Aichi prefecture, Japan, has said it expects global production to rise 5.1 percent from a year earlier to 7.72 million units in the 12 months ending March 31.

Toyota rose 0.4 percent to 2,549 yen.

Toyota’s global output increased 10.6 percent to 626,817 vehicles in August, the first increase after the government ended subsidies for fuel-efficient cars in September 2010, the Toyota City, Japan-based carmaker said Sept. 28. Domestic output gained 12 percent to 252,374, while overseas production rose 9.8 percent to 374,443, it said.

ANN ARBOR—Drivers are urged to keep their eyes on the road and their hands on the wheel — and off their smart phones. But they can be looking straight ahead and still be distracted if they’re engaged in conversation on a hands-free phone or with the car’s voice-activated controls, according to studies at the Massachusetts Institute of Technology.

“Keeping your eyes on the road doesn’t mean your mind is on the road,” said Bryan Reimer, a research scientist at MIT. The university will work with Toyota Motor Corp. on a study to quantify how voice-activated systems affect drivers. The project is one of several that Toyota’s new Collaborative Research Safety Center is conducting with educational and other institutions to improve vehicle safety, reported The Detroit News.

Toyota officials said at the Detroit auto show in January that the company, struggling to restore its reputation after massive safety recalls, would spend $50 million over five years on safety research projects, most of them with U.S. partners.

“The establishment of the Collaborative Safety Research Center was the direct result of the commitment that (Toyota President) Akio Toyoda made to Congress and to the American people that Toyota would advance automotive safety research,” said Chuck Gulash, director of the center.

Its research will be available to other automakers and organizations in a bid to make all cars and trucks safer. The center also aims to contribute and help speed up the establishment of industry-wide standards, said Moritaka Yoshida, Toyota’s chief safety technology officer.

Based in Japan, he traveled to Ann Arbor to attend a two-day conference on the safety projects at Toyota’s North American technical center.

In addition to tackling driver distraction — one of U.S. Transportation Secretary Ray LaHood’s chief concerns — the center also is trying to address the needs of vulnerable groups, such as the elderly, small children and young drivers. Drivers in their teens and early 20s are proportionately involved in far more fatal accidents than other adults, as are people in their late 70s and older.

Vehicle crashes are the leading cause of death for 16- to 19-year-olds, who are less experienced and more reckless than older drivers, studies show.

Toyota is teaming up with the Virginia Tech Transportation Institute on a project to film young drivers and alert them to any risky behaviors they display. The teenagers don’t seem inhibited by the cameras as they eat, dial phones and multitask in other ways — all behind the wheel.

“We believe it’s in the first couple of hours that people forget” that they’re being observed, said Charlie Klauer at the institute.

The widespread use of seat belts and other passive safety systems has helped bring down U.S. traffic fatalities even though people are driving more.

“But still, 30,000 people are killed a year,” said Gulash.

They include a disproportionate number of elderly drivers and passengers whose bodies and bones, particularly rib cages, change shape over the years. They need air bags and seat belts that take this into account.

The elderly also tend to have slower reaction times and reduced fields of vision. But their powers of observation can improve with exercises that can be done on desktop computers, such as the DriveSharp program.

Toyota will develop special senior versions of its virtual test dummies, called Thums, for Total Human Model for Safety, which depict how organs as well as bones react to outside force and are used by suppliers and other companies.

“The collaborative approach is a way to accelerate and also to standardize — which is a really critical issue,” said David Cole, chairman emeritus of the Center for Automotive Research in Ann Arbor and now with AutoHarvest, an organization promoting auto technology sharing.

Among the local projects, Toyota will team up with the University of Michigan Transportation Research Institute to study the relationship between age and seated posture in a car, and how it affects seat belt fit.

Toyota will study Washtenaw County crash data to explore new models of crash data collection and ways to prevent collisions.

It will conduct a three-year study of driver distraction with Wayne State University’s School of Medicine, as well as a longer joint study into body characteristics of children and seniors and how to take them into account when designing safety systems.

Toyota Motor Corp. was able to trim the U.S. price of its new Camry sedan about 2 percent from the previous version in part by re-using old assembly robots from its former joint-venture plant in California.

“A lot of the tooling is new, however the equipment isn’t,” Steve St. Angelo, executive vice president for North American manufacturing and engineering, said in an interview. “We used a lot of used equipment” from the now-closed New United Motor Manufacturing Inc. plant, or Nummi, he said.

The eight versions of the 2012 Camry that go on sale this month cost an average of $25,245.63, down $550.63 from the models they replace, based on prices released by Toyota in a statement on Aug. 23. The high-volume Camry LE’s price fell $200 and the XLE grade dropped $2,000, according to Bloomberg.

Toyota, Asia’s largest carmaker, is under pressure to trim costs and boost the appeal of models such as the top-selling Camry as Hyundai Motor Co. and Ford Motor Co. expand sales of competing midsize and compact cars. While the Camry remains the best-selling car in the U.S. this year, sales are down 7 percent through August. Deliveries of Ford’s midsize Fusion sedan are up 16 percent and Hyundai’s Sonata is up 22 percent.

“They couldn’t have tolerated a price increase for Camry in this market,” said Jim Hall, who runs automotive consulting firm 2953 Analytics Inc. in Birmingham, Michigan. “We’re basically still in a recession.”

Toyota’s North American plants are finding more savings by salvaging equipment no longer needed at some factories, St. Angelo said at the company’s automotive museum this week in Torrance, California.

In the case of the redesigned Camry, “we bought equipment from Nummi,” he said. “We used robots from Nummi,” said St. Angelo, who didn’t elaborate on how much that move saved.

“They were lucky there happened to be a plant closing with surplus equipment available when they were developing the new model,” said Hall. “They haven’t had that before.”

Nummi was the Fremont, California, plant Toyota shared with the former General Motors Corp., which abandoned the factory when it entered a U.S.-backed bankruptcy in 2009. That company emerged as General Motors Co. Toyota opted not to operate the factory alone and closed it last year.

Along with the production robots transferred to Toyota’s Georgetown, Kentucky, plant that makes most of the Camrys sold in North America, Nummi equipment was also acquired by Toyota’s San Antonio plant and by electric-car maker Tesla Motors Inc.

Tesla, which bought most of the former Nummi site, will begin building its battery-powered Model S sedan there next year. Toyota is also a shareholder of Tesla.

Toyota’s U.S. sales unit is also based in Torrance. The company’s American depositary receipts, representing two ordinary shares, rose $1.64, or 2.4 percent, to $71.21 at the 4:03 p.m. in New York Stock Exchange composite trading.

Toyota Motor Corp. resumed full production at all North American plants this week and said it will expand U.S. output of small engines as Japan’s largest automaker works to boost sales slowed by a March earthquake, according to Bloomberg.

As of this week, “all plants and suppliers in North America are at full speed, and most are working overtime,” Steve St. Angelo, executive vice president for North American engineering and manufacturing, told reporters yesterday in Torrance, California. “Our parts problems are now behind us.”

Toyota will also add production of four-cylinder engines at its plant in Huntsville, Alabama, St. Angelo said. The company will hire 240 more workers at the factory, which already makes six- and eight-cylinder engines for Toyota models built in the region, he said. Four-cylinder output will start late this month, said Mike Goss, a Toyota spokesman.

The company briefly halted production after Japan’s record earthquake and tsunami in March and lost sales in markets including the U.S. as reduced supplies of parts and power in Japan led to vehicle shortages. Through August, the Toyota City, Japan-based automaker’s U.S. sales fell 7.8 percent as the industrywide total rose 10.5 percent.

Toyota already makes four-cylinder engines in Georgetown, Kentucky, and Buffalo, West Virginia. The added production will be for Corollas to be built at the company’s Blue Springs, Mississippi, plant, which opens in November, St. Angelo said in an interview yesterday at the company’s U.S. museum in Torrance.

Production of the 2012 Camry that goes on sale this week is accelerating at the Georgetown plant, the company’s largest in North America, said St. Angelo, who joined Toyota in 2005 after working for the former General Motors Corp. for 30 years.

Toyota’s U.S. sales unit is also based in Torrance. The company’s American depositary receipts, each representing two ordinary shares, rose 88 cents, or 1.3 percent, to $69.05 yesterday in New York Stock Exchange composite trading.

TOKYO — Most Japanese automakers reported lackluster vehicle production and sales for July, underscoring ongoing malaise in the industry as it grapples with a strong yen, precarious global economy and recovery from the March 11 tsunami.

Worldwide production at Toyota Motor Corp. fell 6.1 percent from a year earlier to 594,614 vehicles, the company said Tuesday. Its domestic sales of passenger cars, trucks and buses tumbled more than 35 percent, and exports fell 5 percent due to weaker shipments to North America, according to The Detroit News.

Toyota, however, said its production returned to levels that were near to what it had planned before the March earthquake and tsunami struck Japan’s northeastern coast, wiping out auto parts suppliers.

The automaker is preparing to ramp up production in the coming months to make up for the capacity lost to the disaster. Between October and March 2012, the automaker plans to build an extra 350,000 vehicles.

The numbers were worse at Honda Motor Co., where global production tumbled more than 34 percent to 206,727 vehicles in July. It was the sixth straight month of decline.

Honda’s domestic sales of vehicles fell 31.5 percent and exports retreated more than 19 percent.

Standing above the crowd was Nissan Motor Co., which continued to gain momentum and set company records in July.

The Yokohama-based automaker recorded an almost 18 percent jump in worldwide output to 388,680 vehicles — its best-ever July performance. Production in the U.S. benefited from stronger demand for the Altima sedan, Nissan said.

Although Nissan’s Japan sales fell 17 percent in volume terms, global sales overall rose 8 percent. Exports surged more than 23 percent.

Among Japan’s other car makers, Suzuki Motor Corp. posted a 3.6 percent decline in global production to 228,147 vehicles.

Worldwide output at Mazda Motor Corp. fell almost 13 percent to 103,384 vehicles. At Mitsubishi Motors Corp., it declined about 5 percent to 97,862 vehicles.

General Motors Co. outsold Toyota Motor Corp. globally in the first six months to become the world’s largest automaker after the record March earthquake disrupted production in Japan.

GM sales rose 8.9 percent to 4.536 million units in the half-year ended June 30, the Detroit-based automaker said in a statement yesterday. That compares with 4.13 million units at second-ranked Volkswagen AG and 3.71 million units for Toyota, including its luxury Lexus marque and affiliates Daihatsu Motor Co. and Hino Motors Ltd., according to statements by the companies.

Output at the Toyota City, Japan-based automaker slumped 23 percent to 3.37 million units in the half-year after the company halted production following the magnitude-9 temblor and tsunami in March, reported Bloomberg. Toyota expects to enter a production recovery phase in September, one month earlier than previously announced, it said Aug. 2.

“Even if Toyota recovers production, it will take another few more months for sales to actually recover” as it takes time to deliver vehicles to dealers, said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo. “Toyota’s sales may trail behind Volkswagen in the full-year as well.”

GM’s U.S. sales climbed to 669,065 vehicles in the second quarter, according to industry researcher Autodata Corp. The Chevrolet Cruze was the top-selling car in the market in June and the Chevy Silverado full-size pickup remained the second- most popular vehicle, behind only Ford Motor Co.’s F-Series line.

Hyundai Motor Co., South Korea’s largest automaker, had a 11 percent jump in first-half deliveries of 1.96 million units.

Toyota shares fell 3.8 percent to 3,020 yen as of the 11:30 a.m. trading break in Tokyo. The benchmark Nikkei 225 Stock Average declined 3.4 percent.