Large automakers are still among the top companies, worldwide, for R&D spending, despite a trend toward reliance on suppliers. One study surveyed by the CAR group found auto companies make up one-quarter of the top 20 corporate spenders on R&D globally.



Sample of 2012 R&D Spending by Leading US Companies (in millions USD). Source: IRI 2013, CAR. Click to enlarge.

The auto industry spends on average 4% of revenues on R&D—one-third more than the national average of nearly 3%. For larger automotive companies, R&D spending is at an even higher level that typically ranges above the 5% of revenues mark. The auto industry also usually funds a greater share of its R&D activities than do other industries.

Prior to the recession, industry funding for R&D averaged above 98%; government and other sources covered the remainder. With the recovery, government and non-industry research interest in clean energy and connected vehicle technology has spurred new and significant R&D investment by these entities. It is estimated that non-industry funding now supports nearly 10% of total auto industry R&D activities.

One dozen companies dominate automotive R&D spending in the US, collectively accounting for 80% of total R&D spending, or more than $14 billion. These companies include both automakers and Tier 1 parts suppliers. Worldwide, five automakers—Volkswagen, Toyota, General Motors, Honda, and Daimler—are among the top 20 companies for all corporate research and development spending as ranked by Booz’s annual global R&D report.Volkswagen is first, with more than $11 billion in spending.