Annual spring wage negotiations entered full swing Wednesday as unions from the country's major automakers submitted their requests to management.
Unions at Toyota Motor Corp. and Subaru Corp. have demanded monthly base wage increases of ¥3,000 ($27) at this year's wage talks, which serve as a bellwether for other industries. They have also requested 6.6 and 6 months' worth of salary, respectively, for one-time bonuses.
The demand comes as Prime Minister Shinzo Abe is urging business leaders to raise wages by 3 percent in fiscal 2018, calling for a fifth straight year of increases to spur consumption and exit chronic deflation.
But even if the request from Toyota's union is fully met, the monthly pay increase will still only reach 2.87 percent.
Major carmakers have been reporting record group net profits for April to December with U.S. President Donald Trump's tax reforms, signed last December, reducing their tax burden.
However, automakers are also investing huge amounts of cash to develop electric cars and autonomous driving technologies amid increasingly fierce competition around the globe.
Unions at Nissan Motor Co. and Subaru are also likely to face tough negotiations after inspection scandals last year hurt their profitability. In the scandals, unauthorized workers were found to have been involved in final tests on cars.
In 2017 the unions requested a monthly base wage increase of ¥3,000, and the Confederation of Japan Automobile Workers' Unions is urging its members to request the same level or more this year.
Labor unions for steel and shipbuilding companies submitted their wage requests last week, while the unions at major electronics makers will do so by Thursday. The companies are expected to respond on March 14.