ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Business trends

Japan carmakers pump record $27bn into R&D

Quest for new technologies ignites arms race, but Western rivals spend more

Nissan, the maker of the mass-market Leaf electric car, is working with Japanese tech company DeNA on a self-driving taxi service.   © Reuters

TOKYO -- Leading Japanese automakers plan a record 2.95 trillion yen ($26.8 billion) in research and development spending for fiscal 2018 amid global competition and the encroachment of information technology companies onto their traditional turf.

Much of this money will go into connected cars, automated driving, sharing and electrified vehicles -- challenges so big that automakers are embracing cooperation to compete with bigger-spending companies like Google.

Toyota Motor, Nissan Motor, Honda Motor, Suzuki Motor and Mazda Motor are each putting forward their biggest R&D budgets ever. Mitsubishi Motors' tally also will be its highest since a 2003 spinoff of truck and bus operations.

The combined total, including Subaru, will mark a roughly $1.3 billion increase on the year and a second straight annual rise.

Toyota, which has earmarked $9.8 billion in R&D spending this fiscal year, is working with many partners. It announced in March the creation of a joint venture with group suppliers Denso and Aisin Seiki to focus on commercializing automated-driving software. The trio plans more than $2.7 billion in spending over the next few years.

Toyota has also set up with Mazda and Denso a separate business to develop core technologies for electric vehicles. Suzuki and Subaru have also joined the initiative. Toyota works with Panasonic on batteries as well.

Nissan has been developing a new electric model with a longer range by building on its experience with the mass-market Leaf. It is also collaborating with Japanese internet company DeNA on self-driving taxis. "Electrification and autonomous driving are highly compatible with each other," Nissan President Hiroto Saikawa has said.

International rivals are spending even more heavily on R&D. Volkswagen's figure reached 11.6 billion euros ($13.4 billion) in fiscal 2017, QUICK-FactSet data shows -- roughly half the combined fiscal 2018 plans of the seven Japanese carmakers.

General Motors, which spent about $7.3 billion on R&D in fiscal 2017, revealed in late May that an autonomous driving unit would take $2.25 billion in investment from SoftBank Group's Vision Fund.

With IT increasingly prominent in the auto industry, Google parent Alphabet poured $16.6 billion into R&D last fiscal year, while Apple spent roughly $11.5 billion. These sums include much that is unrelated to automobiles, but Toyota President Akio Toyoda concedes that "the pace of spending is a few times faster at technology companies than in the auto industry."

The auto industry accounts for nearly a quarter of all R&D spending in Japan's manufacturing sector.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more