Toyota Cuts Sales Budgets, Hikes Spending on Tech

Toyota Motor Corp. is trimming spending on sales and marketing so it can invest more heavily in tech research, sources tell Reuters.

One senior company official frets, “We don’t think we are keeping up” with rivals in the pursuit of such innovations as autonomous driving systems.

In the last fiscal year ended March 31, Toyota spent 2.7 trillion yen ($25 billion) on marketing and general expenses. Koji Kobayashi, Toyota’s chief financial and risk officer, tells Reuters he wants to find cheaper and more innovative ways to market the company’s products— and funnel the savings into r&d.

The sources say Kobayashi and Toyota President Akio Toyoda perceive a major gap between Toyota’s ultra-efficient manufacturing techniques and what they consider its more wasteful sales efforts.

The sources note that the shift in spending patterns was first evidenced by Toyota recently canceling marketing contracts with long-time ad agency Dentsu Inc.

One of Reuters’ sources says Toyoda and Kobayashi were alarmed by out-of-control extravagance” in the agency’s spending for two recent events: a ride-and-drive in China for Toyota’s Lexus luxury brand and an opulent Toyota display at this year’s Beijing auto show.