The world's top auto company, Toyota is in touch with South Korean company POSCO to get steel for its operations. Toyota Motor Corp. is suffering losses due to low sales and has been employing various cost cutting methods to mitigate the impact of global slowdown. Entire automobile sector is facing the heat of global slowdown with significant decline in sales.

POSCO is the fourth largest supplier of steel in the world. It is already supplying steel to leading Japanese auto giants. The spokesperson of POSCO, Ko Min-jin said, "We are in talks with Toyota on a similar deal."

Japan's Asahi newspaper has confirmed Toyota's intentions to use POSCIO products for its operations on Sunday. POSCO has a good market share in the domestic market of Japan and its products are relatively cheaper than products of its competitors in the regional market.

A Kyobo Securities analyst, Eom Jin-seok added, "The deal is very likely as POSCO is already selling steel for Toyota for production in Thailand."

Toyota has earlier asked its suppliers namely Nippon Steel and JFE to revise prices of steel following low demand and low vehicle sale.

Shares of POSCO declined 4.2 percent at the Japanese stock exchange.