Four major carmakers in Japan — Honda Motor, Toyota Motor, Mazda Motor and Subaru — are anticipated to spend a combined record-high 3.25 trillion yen (US$27.22 billion) for R&D activities for their fiscal 2015 that ends on March 31 next year. (image: Nadir Hashmi/flickr)
SEOUL, May 7 (Korea Bizwire) — Japanese automakers are expected to spend a record amount on research and development (R&D) activities this year, data showed Thursday, raising concerns that South Korean rivals’ competitiveness may be further hurt amid unfavorable currency exchange rate conditions.
Four major carmakers in Japan — Honda Motor, Toyota Motor, Mazda Motor and Subaru – are anticipated to spend a combined record-high 3.25 trillion yen (US$27.22 billion) for R&D activities for their fiscal 2015 that ends on March 31 next year, according to the data compiled by the Korea Automotive Research Institute (KARI).
Honda Motor set its R&D spending at 720 billion yen, up 7.1 percent on-year, and Mazda Motor will also be raising its spending by 15.3 percent to 125 billion yen, the data showed. Toyota Motor and Subaru are also likely to spend 7.1 percent more each at 1.5 trillion yen and 900 billion yen.
The rise in investments comes as the Japanese automakers seek to use their soaring profits from favorable foreign exchange rates for developing new technology, according to industry watchers.
“The move reflects their expectations for improved earnings on the back of the weakening Japanese yen against other currencies,” said Lee Jun-ho, a researcher at KARI.
“They are aiming to fortify technological competitiveness, such as in fuel efficiency and autonomous driving capability, by continuously investing in the R&D sector.”
The Japanese yen, aided by expansionary fiscal and easing monetary policies, has been losing ground against other currencies, including the South Korean won, in recent years. The won-yen arbitrated exchange rate stood at 898.52 won per 100 yen on April 28, the highest since Feb. 28, 2008, when the comparable figure was 889.23.
South Korea and Japan directly compete in overseas markets over products ranging from electronics goods to autos.
On the back of the exchange rate advantage, Japanese automakers are also looking to relocate their overseas productions to manufacturing plants in their home country.
Toyota is planning to move part of its Camry midsize sedan production from the U.S. to a factory in Japan starting in 2017, while Honda is set to do the same with the Fit subcompact by moving production from its Mexico plant to its home turf by March next year.
“If Japanese auto companies increase R&D spending and local production, their technology in other related areas, including machinery and electronics, may also improve, making business conditions even more difficult for South Korean manufacturers,” an industry official said.
(Yonhap)
