"Annual Loss Over 19 Trillion Won"... Japanese Auto Companies in 'Emergency' Due to US Tariffs

Korea Economic Daily

Summary

It was reported that the annual operating profit of Japanese car manufacturers is expected to decrease by more than 2 trillion yen due to the tariff policy of the Trump administration.
Specific predictions of profit reduction for major companies like Toyota, Honda, and Nissan have been made, and concerns about profit reduction are intensifying.
Yomiuri reported that Japanese car manufacturers are seeking efforts to reduce the impact of tariffs through supply chain reorganization and production base changes.

Yomiuri Shimbun Report

Toyota, Honda, Nissan, etc.

Significant Profit Reduction Forecasts Follow

There is a forecast that the annual operating profit of Japanese car manufacturers could decrease by more than 2 trillion yen (about 19.2 trillion won) due to the tariff policy of the Donald Trump administration.

According to a report by Yomiuri Shimbun on the 14th, President Trump imposed a 25% tariff on automobiles, a key item accounting for about 30% of Japan's exports to the US, starting from the 3rd of last month. Additionally, a 25% tariff on auto parts took effect on the 3rd of this month.

Looking at the fiscal year 2025 forecasts announced by six major Japanese automakers until the previous day, Toyota Motor's profit is expected to decrease by about 180 billion yen (about 1.7 trillion won) just in April-May this year due to US tariff measures. Annually, it could exceed 1 trillion yen (about 9.6 trillion won).

Honda also forecasts that its operating profit for 2025 could decrease by 650 billion yen (about 6.3 trillion won) if motorcycles are included.

Nissan Motor, which recorded massive losses due to poor performance, estimates the expected profit decrease for 2025 to be up to 450 billion yen (about 4.3 trillion won).

Mazda judged that its profit decreased by 9 to 10 billion yen (about 86 to 96 billion won) just in April this year, and Mitsubishi Motors predicts a profit decrease of about 40 billion yen (about 385 billion won) for 2025.

Even Suzuki, which does not sell cars in the US, forecasts a profit decrease of 40 billion yen. Toshihiro Suzuki, who leads Suzuki, emphasized that "we must be prepared for a global issue and an economic downturn" regarding US tariffs.

Japanese car manufacturers are seeking to reduce the impact of tariffs through supply chain reorganization and cooperation.

Toyota is considering changing some overseas bases for US export cars while maintaining the Japanese production system. Honda plans to produce some of the US export products, which were made in Canada and Japan, in the US.

Mitsubishi Motors, which does not have a factory in the US, plans to jointly produce SUVs at Nissan's US plant.

Yomiuri stated, "The US claims that auto tariffs are not included in the agenda in tariff negotiations with Japan," and "there is a concern that the rough road for Japanese companies will continue for the time being."

Goh Jeong-sam, Hankyung.com reporter jsk@hankyung.com