Research and development costs are likely to "slightly go up" even as the company trims costs as it needs to continue developing new technologies to be ready for changes in the market, Cho said.
In September Nissan Motor Co., Japan's second-largest automaker, said it planned to sell hybrid vehicles using Toyota's system in 2006, surprising analysts and investors. Other companies Toyota is currently working with include Renault SA, Nissan's alliance partner, PSA Peugeot Citroen, and General Motors Corp, with which it cooperates in a variety of projects including environmental technology.