Toyota to cut managers' summer bonus due to high R&D costs

14:38 | 14/06/2019 Global Economy

Toyota Motor Corp. will cut summer bonuses for some 9,800 managers by 4 to 5 percent, as it looks to tighten cost control in the face of high spending on developing technology for autonomous and electrified vehicles, a source close to the matter said Thursday.

Shareholders attend Toyota Motor Corp.'s annual shareholders meeting at its headquarters in Toyota, Aichi Prefecture - Photo: KYODO

The decision comes even as the company expects a 19.5 percent rise in net profit in the current fiscal year, and reflects an uncertain business outlook due to the prolonged trade war between the United States and China, the source said. Toyota President Akio Toyoda said Thursday at an annual shareholders’ meeting that his company is boosting efforts in developing zero-emission vehicles including fuel cell vehicles. “We are facing a once-in-a-century transformation. I hope to build a mobility society of the future with our shareholders,” Toyoda said at the meeting at its headquarters in Aichi Prefecture.

Competition is intensifying, with new rivals such as technology giant Google LLC now in the markets for electric and self-driving vehicles and new transportation services.

In recent years, Toyota has struck cross-industry tie-ups with partners such as investment giant SoftBank Group Corp., leading ride-share service provider Uber Technologies Inc. and ride-hailing company Grab Holdings Inc. of Singapore.

Japan’s biggest automaker plans to spend a record ¥1.1 trillion ($10 billion) in research and development operations in the year through March 2020, up 4.9 percent from the previous year. The firm expects a group net profit of ¥2.25 trillion on group sales of ¥30 trillion in the current fiscal year.

At the shareholders meeting, some shareholders asked about Toyota’s efforts to reduce accidents, after incidents involving elderly drivers came under the spotlight recently in Japan as its population rapidly grays.

“How far along is Toyota’s technology being developed for cars that can stop automatically when a driver makes a mistake?” one shareholder asked company executives at the meeting.

A Toyota executive responded that its engineers versed in artificial intelligence technology are working on enhancing safety systems.

The number of fatal traffic accidents has been declining in recent years in Japan, but accidents deemed to be caused by people aged 75 or older increased to 460 in 2018 — up by 42 from a year earlier.

Of the 460, 136 cases involved drivers believed to have became confused when using the pedals or steering wheel.

Theo Japantimes