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Automotive sector lags behind in R&D spending

Five of the world’s top 20 research and development spenders in 2008 were from the automotive industry and, according to a report from consulting firm Booz and Co., Toyota retained its spot at the top.


Toyota invested AUD$9.62 billion in R&D last year, down 5.7 per cent from 2007, but still accounting for 4.4 per cent of its sales income.

General Motors slipped from second to fifth following a 1.2 per cent reduction in spending – down to $8.55 billion – while Ford dropped from sixth to eighth.

Honda held steady in 16th position and, at 5.6 per cent, spent a greater percentage of its sales revenue on R&D than any other automotive company.

Despite this, its investment of $5.99 billion was 4.2 per cent lower than in 2007.

Volkswagen was the only automotive group to reverse the trend and increase R&D spending.

Its $5.81 billion represented an increase of 6.7 per cent over 2007, pushing up to 3.3 per cent of sales income.

Compared to other sectors, however, the automotive industry is lagging behind.

Among the top 20, the average change in R&D spending was a 3.2 per cent increase, while the 8.0 per cent of sales spending average eclipsed all of the five car manufacturers.

Some of the best performers were Nokia ($9.34 billion spent, 5.7 per cent increase, 11.8 per cent of sales), Roche Holdings ($8.74 billion, 5.5 per cent, 19.4 per cent) and Microsoft ($8.74 billion, 14.6 per cent, 13.5 per cent).

In constructing the report, Booz and Co. analysed key financial metrics for each of the top 1000 companies from 2001 to 2008, including sales, gross profit, operating profit, net profit, R&D expenditure and market capitalisation.

by Tim Beissmann

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