In fiscal year 2026, Japan’s seven leading automakers are set to invest a staggering 4.22 trillion yen in research and development (R&D), representing a 1.4% year-on-year increase and marking a new record for the industry. Among these, Toyota stands out with plans to allocate 1.6 trillion yen, a 5% rise from the previous year, also setting a fresh benchmark. The president of Toyota has announced that the company will accelerate R&D efforts across multiple fronts, including globalization and the development of a hydrogen energy society. Presently, Japanese automakers are contending with intensifying competitive pressures from the rapid ascent of Chinese automakers. While they have eased back on direct investments in the pure electric vehicle sector, they have ramped up their focus on autonomous driving technologies and software-defined vehicles. However, the profitability of these seven automakers is under strain, with their total net profit projected to plummet from 7.54 trillion yen in fiscal year 2023 to around 3.9 trillion yen in fiscal year 2026.