TOYOTA CITY (Reuters) - Toyota Motor Corp (7203.T) on Wednesday said it had agreed to a more modest wage rise than last year, as uncertainties about the global business environment prompt the Japanese automaker to tighten its purse strings.
The company announced an average monthly base wage increase of 1,300 yen ($11.32) for the financial year beginning in April, 13 percent lower than the previous year’s rise and less than half the union’s demand.
Toyota’s increase was the smallest among Japan’s top three automakers, trailing a 1,500 yen raise agreed at Nissan Motor Co (7201.T), which was also lower than last year, and Honda Motor Co (7267.T) which matched last year’s 3,000 yen raise.
As the lowest increase in Toyota’s four-year run of pay hikes, it reflects the nationwide trend of slugging wage growth and casts doubt on Prime Minister Shinzo Abe’s efforts to boost the economy through domestic consumption.
“Considering the uncertainties ahead and earnings prospects, it was difficult to agree to an increase along the lines of last year‘s,” Tatsuro Ueda, chief officer of general administration and human resources at Toyota, told reporters.
The agreement by the country’s largest automaker, which is considered a bellwether in the country’s annual wage negotiations, fell short of demands by its union for an annual increase of 3,000 yen, and is lower than last year’s 1,500 yen rise and 4,000 yen in 2015.
Reporting by Maki Shiraki and Naomi Tajitsu; Editing by Stephen Coates