Toyota Motor on Wednesday stated it had accepted a more modest wage rise than last year, as uncertainties about the worldwide business environment trigger the Japanese automaker to tighten its purse strings.
The automaker revealed a typical regular monthly base wage increase of 1,300 yen ($11.32) for the financial year starting in April, 13 percent lower than the previous year’s increase and less than half the union’s demand.
Toyota’s boost was the tiniest amongst Japan’s leading three automakers, trailing a 1,500 yen raise agreed at Nissan Motor, which was also less than last year, and Honda Motor which matched in 2016’s 3,000 yen raise.
As the lowest boost in Toyota’s four-year run of pay increase, it shows the nationwide pattern of slugging wage growth and calls into question Prime Minister Shinzo Abe’s efforts to improve the economy through domestic usage.
“Considering the uncertainties ahead and profits potential customers, it was tough to accept an increase along the lines of in 2015’s,” Tatsuro Ueda, chief officer of general administration and personnels at Toyota, informed press reporters.
The contract by the nation’s largest automaker, which is thought about a bellwether in the country’s annual wage negotiations, disappointed demands by its union for an annual boost of 3,000 yen, and is lower than in 2016’s 1,500 yen increase and 4,000 yen in 2015.