Japanese car brand Toyota has embarked on a process of reappraising its priorities in business with a decision to slash budgets in sales and marketing (worth $24.66bn in the year to March) in order to reallocate resources toward research and development.
This shift in emphasis has already seen it tear up contracts with the Chinese arm of Dentsu, its long-standing communication and advertising agency, in favour of non-traditional (and cheaper) advertising approaches – saving itself around $50m annually.
In this way Toyota aims to become a lither operation in the mould of Apple, Google, Tesla and Tencent which rely on their technological nous to sell their businesses, such as autonomous vehicles.
Toyota is believed to have become alarmed at escalating costs of hosting events, such as a ride-and-drive for its Lexus brand and a display stand at the Beijing auto show, having previously weathered an overcharging scandal, prompting it to pull the plug.
An unnamed Toyota official told Reuters: “We may be posting record profits, but we don't think we are keeping up with their pace of investments.”
Toyota hopes that by bringing many such functions in-house it can grow its profit margin in line with Silicon Valley tech titans