Toyota and Honda Take Action Against Inflation
Most of us have little confidence in our employers increasing wages, but both Toyota and Honda are doing just that to combat inflation.
We’ve all felt the impacts of the latest inflation hit. Inflation has hit every part of the world. You can find social media posts all over the internet talking, mostly to some extreme, about how much more groceries cost than they did only a few short months ago. Although most see gas prices leveling off, it wouldn’t take much for them to skyrocket once again; and don’t even get started on the price of eggs.
Unions in Japan have their demands met
For the third straight year, Toyota has met every single demand put on the table by the labor union. Although Toyota hasn’t disclosed the percentage increase in pay, they have agreed to an announced the pay increase for this year is the largest wage hike in decades. Additionally, those union workers that qualify for bonuses will receive amounts equal to 6.7 month’s salary, which is a pretty generous bonus. Both of these actions are meant to offset the impact of inflation on Toyota employees in Japan.
Is Honda taking similar action to Toyota?
As Toyota and Honda work to fight against inflation in Japan, we see Honda also offering a new wage increase. This increase is five percent across the board at the various Honda plants in Japan. Although this amount represents the highest increase in wages in more than thirty years, saying that sounds like Honda forgot to give increases over the last three decades, which isn’t the case. This particular wage increase just happens to be the largest percentage offered in the past three decades which should be exciting for many workers at the Honda factories in Japan.
Will these increases cover the expected inflation in Japan?
The Bank of Japan projects a two percent inflation target, which requires a minimum of three percent wage growth to support this inflation. With Honda offering five percent and Toyota showing an undisclosed amount but the largest increase in decades, we can surmise that these wage increases will cover the expected inflation and leave a little more for union workers. This is what many expect when they receive an increase in their pay. This recent move by Toyota and Honda could, hopefully, have a similar impact in other countries where these companies own factories and build vehicles.
Where do Honda and Toyota sit in the automotive market?
Toyota is one of the world’s largest automakers, and in some minds, they are the largest. Toyota has been considered one of the most reliable automotive brands for many years, which has trickled into its luxury arm, Lexus. The Toyota lineup in America extensive enough that you can find a Toyota vehicle that fits nearly every need to give you the right model to drive and enjoy for several years. With proper care and maintenance, many consider Toyota vehicles to be the most reliable and dependable offered.
Honda is one of the world’s largest companies, even if its not in the top few as an automaker. Honda builds nearly everything you can think of with an engine. This means anything from a power generator to provide home power when the electricity is out to motorcycles and even lawnmowers. Somewhere in your life, its likely you have a Honda engine powering something you own or use every day. The Honda lineup of vehicles isn’t nearly as extensive as Toyota, but Hondas are dependable, useful, and reliable vehicles that we’ve trusted for many years.
Do Honda and Toyota vehicles compete head-to-head?
In many ways, the entire Honda lineup competes with at least one Toyota model. Although both Honda and Toyota are working to address the inflation problem in Japan with wage hikes, these two brands compete fiercely in the automotive world.
The Toyota Corolla has its nemesis in the Honda Civic. Similarly the Honda Accord has been playing catch up with the Toyota Camry for many years. Even the minivan go head-to-head with the Honda Odyssey often nudging out the Toyota Sienna for overall comfort, quality, and value. These two well-known brand names compete fiercely in the automotive world ever year.
Don’t get us started in the SUVs
The explosion of SUVs in America has made a pathway for both Honda and Toyota to continue their strong competition against each other. Typically, the SUV categories with at least one Honda or Toyota model includes will show that vehicle at the top of the list. We see the Honda HR-V taking on the Toyota C-HR, the Honda CR-V competes against the Toyota RAV4, and the Honda Pilot is pitted against the Toyota Highlander. Unfortunately, the Honda Passport doesn’t have a real Toyota counterpart, the 4Runner might be the closest but its much larger than the Passport.
Are the trucks competitive with each other?
The truck class is one area where Toyota has a substantial lead over Honda. Toyota brings the Tundra full-size truck and the Tacoma midsize pickup to the market. The Tacoma has been the top-selling truck in its class for many years and the Tundra competes with the Detroit Big Three. Unfortunately, the Honda Ridgeline isn’t nearly as rugged as the Tacoma, making it a unique midsize truck that delivers a completely different ride and quality than the more traditional models in this pickup truck class.
Will these new wage increases spread across the globe?
Although Honda and Toyota battling inflation in Japan might not be enough to impact the rest of the world, it could at least get things started in the automotive sector. Other industries face different challenges and many workers might not have the backing of a strong union presence the same way workers at the Toyota and Honda plants in Japan enjoy. It will be interesting to see if other automakers follow suit and begin to offer increases that are much higher than the expected inflation rate to help their employees handle the continued increase in the price of goods and services.
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