Toyota to Shift Marketing Budget into Research & Development

Lexus Ride Event

Toyota, and Lexus by extension, plans to cut costs associated with sales and marketing, using the resources to further research into autonomous vehicles and other advanced tech — from Reuters:

“We may be posting record profits, but we don’t think we are keeping up with their pace of investments,” one of the sources, a senior Toyota official, told Reuters.

To do that, [CFO Koji] Kobayashi wants to tap into money once earmarked for automotive marketing and general expenses, which for the year that ended in March totaled 2.72 trillion yen ($24.66 billion).

This move was initiated by Toyota canceling contracts with the China unit of advertising agency, Dentsu Inc.:

Toyota was frustrated with the cost of at least two events Dentsu organized in China: a ride-and-drive for Toyota’s premium Lexus brand in March and the Beijing auto show display stand for Toyota in April.

A review by the automaker showed “out-of-control extravagance in how it executed those events – not over-billing,” another one of the sources said. Beijing Dentsu declined to comment.