14-05-2025
- Automotive
- Yomiuri Shimbun
Combined Operating Profits of 6 Japanese Automakers May Decline ¥2 tril. as Result of Trump's Tariffs
AP file photo
New Toyota vehicles are parked at Toyota Logistics Service Inc., the company's most significant imported vehicle processing facility in North America, at the Port of Long Beach in Long Beach, Calif., on March 26.
The combined operating profits of six major automakers are expected to decline more than ¥2 trillion, according to their outlooks of financial results for the year ending March 31, 2026.
The negative outlooks that were released by Tuesday came in the wake of U.S. President Donald Trump's announcement that tariffs would be imposed. The United States is the main market for many Japanese automakers.
Honda Motor Co. said on Tuesday that it expects its operating profit will be reduced by up to ¥650 billion in fiscal 2025.
'It is quite a large figure, but this is the worst-case scenario for the company,' Chief Financial Officer Eiji Fujimura said.
Toyota Motor Corp. estimated that its costs would increase by ¥180 billion in the two months of April and May as a result of the U.S. tariff measures. Toyota expects its operating profit to decline by more than ¥1 trillion for the fiscal year.
The U.S. tariff measures also hurt Suzuki Motor Corp., which does not sell four-wheeled vehicles in the United States.
'We must be prepared for an economic downturn as [the impact of the tariffs] is a global issue,' Suzuki President Toshihiro Suzuki said on Monday.
The company said its operating profit will be cut back by ¥40 billion for fiscal 2025 due to reciprocal tariffs imposed on motorcycles in addition to any possible economic downturn.
Automakers are rushing to formulate measures to reduce their financial burdens.
Toyota is considering shifting some exports to the United States to other countries, while maintaining its domestic production systems. Honda plans to increase the production of certain models in the United States while reducing the number of models exported to the United States from Canada and Japan. Mitsubishi Motors Corp., which does not have a plant in the United States, is considering producing sport utility vehicles jointly with Nissan at the latter's U.S. factory.
The business deterioration of the automotive industry, which has a broad production base, would inevitably affect parts makers. It would also be directly linked to the cooling of the Japanese economy as a whole.
The United States has claimed that automotive tariffs are off the table in trade negotiations with Japan, raising concern that Japanese automakers may continuously face challenges for the time being.
