Along with employees of other Japanese companies such as Honda Motor Co. Ltd and Toshiba Corp., the workers of Toyota Motor Corp. have received their first base pay rise in 6 years amid record profit of 1.9 trillion yen posted by the company for the year through March 31st. This step is considered as a significant part of the so-called Abenomics, which is the economic reform programme in the region. The auto manufacturers revenues have been benefited by the weaker currency.
The base pay rise of Toyota Motor Corp.s workers was eagerly awaited provided the fact that record profits were posted by the company. Toyota also managed to increase its full-year profit forecast twice in the last few months.
Naoki Miyazaki, who is the Senior Managing Officer of Toyota Motor Corp., announced in an interview that the average employees of the company, who are members of the Workers Union will be paid 2,700 yen (26 dollars) more in base pay on a monthly basis. This is a 0.8% increase of the average salary they got in 2013, but is also lower than the 4,000-yen increase that was demanded by the Union. Mr. Miyazaki also said for Bloomberg: “Deflation should be eliminated from Japan as quickly as possible. Toyota and the union will make a contribution. We have a role to play.”
Currently, over 50,000 employees are represented by the Toyota Motor Workers Union. The request of the latter for an increase to the average bonus to 2.44 million yen, was granted by the largest car manufacturer in the world. The rise corresponds to 6.8 months of salary.
The Chief economist of Japan Macro Advisors – Takuji Okubo said in an interview, which was cited by Bloomberg: “If the Japanese economy was more likely to continue to grow for another 12 months, we would see much more robust growth in wages.”
Toyota Motor Corp. fell by 1.95% in Tokyo to close the session at 5 728 yen, marking a one-year change of +15.48% and a market value of 19.74 trillion yen. According to the Financial Times, the 23 analysts offering 12-month price targets for Toyota Motor Corp. have a median target of 8 000 yen, with a high estimate of 9 600 yen and a low estimate of 6 200 yen. The median estimate represents a 36.94% increase from the last close.
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