Automotive R&D Budgets Fall by $12 Billion in 2009, Study Finds

Automobile Staff

According to a new study, the automotive industry's research and development spending declined by $12 billion in 2009

The study, conducted by a global management consulting firm called Booz & Company, placed Toyota, General Motors, Volkswagen, Honda, and Ford in the Top 20 list of R&D spenders. Toyota was the top spender in 2008 but dropped to the fourth position, with $7.8 billion in R&D investments, down 19.8 percent from 2008. Earlier this year, Toyota responded to criticism from Ralph Nader over a claimed safety investment by noting that Booz & Company found the automaker to spend more on R&D than any other automaker in 2007, 2008, and 2009.

As the automotive industry reduced its spending, healthcare companies took up the slack. Five of the top 10 spending companies were connected to healthcare. General Motors was the second automotive company on the list, with $6 billion in spending, down a full 25 percent in 2009 compared to 2008. Volkswagen spent $5.4 billion, according to the study, actually increasing 3.6 percent year-over-year.

Honda and Ford lowered their R&D budgets in 2009. It was in 2009 that Honda suspended its V-8 engine program, instead focusing on midsized and large hybrid vehicle technology. In 2009, Honda spent $5 billion, down 17.7 percent from 2008 while Ford spent $4.9 billion, dropping from the eighth position on the list in 2008 to 20th in 2009.

With the automotive industry slowly turning around, we wonder how the Top 20 R&D list will change for 2010. What do you think: Will automakers increase their rank on the list for 2010? Or is how you spend R&D money more important than how much you're spending?

Source: Booz & Company via Ward's Auto

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