A year ago, the largest car manufacturer in the world was in tears. American consumers took the hybrids of Toyota Motor, and a low yen inflated the value of the company’s income. In May, Toyota declared the highest annual profit ever recorded by a Japanese company.
Thursday, Toyota presented a much darker perspective, providing that its operating profit would decrease by about a fifth for the exercise ending in March. He cited the winds of a stronger yen and predicted a $ 1.3 billion from President Trump’s prices in April and May.
The company estimated the effect of car rates, which started in April, only for these two months. Beyond that, their impact is “very difficult to plan,” said Toyota director of Toyota, Koji Sato on Thursday. “The current environment surrounding the automotive industry, including trade relations, is in extreme flow,” he said.
The darkness of Toyota’s forecasts underlines how the cervical boost of Mr. Trump’s pricing program goes up the automotive industry and leaving many global companies unable to estimate future prospects. A 25% rate on vehicle imports in the United States, implemented at the beginning of last month, was extended to car parts last week.
The pain that Toyota already experiences from prices also highlights the difficult training in which Japan is confronted in its current negotiations with the Trump administration.
While Mr. Trump has interrupted a 24 percent tax on Japan imports until early July, higher car rates are already in place and harm the country’s pillar industry. Automobiles and automotive parts are by far the main exports from Japan to the United States.
Ryosei Akazawa, the best tokyo envoy for price talks, recently said that new American rates cost a Japanese automaker 1 million dollars per hour. However, negotiations have evolved slowly, bogging down at least in part because Washington reported that the main request from Japan – an exemption from car rates – is not for negotiation.
After his return from the last series of talks in Washington, Mr. Akazawa said during the weekend that the two parties were unable to find common ground. Prime Minister Shigeru Ishiba has urged patience, saying Japan should not rush to conclude an agreement that would sacrifice the country’s longer -term interests.
Economists and managers are concerned about the broader potential impact of prices on the Japanese economy, because car manufacturers and their vast network of parts suppliers form the backbone of industrial production in Japan. Last week, the central bank of Japan more than half reduced its forecasts of economic growth, citing the taxation of an “unprecedented level” of prices by the United States.
Toyota’s remarks suggested on Thursday a difficult period to come for the Japanese automotive industry as a whole, especially because most analysts consider Toyota to be one of the less vulnerable Japanese car manufacturers to Mr. Trump’s prices.
Of the more than 2.3 million vehicles that Toyota sells each year in the United States, only around 500,000 are exported from Japan. And despite the profits to the profits, the company provided that its sales in North America would increase this exercise by 237,000 units.
The smallest Japanese car manufacturers such as Mazda and Subaru sell a significantly higher proportion of vehicles imported into the United States, while Mitsubishi Motors has no factories in the country. The automakers of the second and third largest, Honda and Nissan in Japan, should announce the results of the exercise next week.
Car manufacturers outside Japan also predict difficulties. Last week, General Motors reduced its procurement forecasts by 2025 by more than 20%, citing planned cost increases of $ 4 billion or more this year due to Trump prices. Many European car manufacturers have decided to suspend their financial forecasts for 2025 due to tariff uncertainties.
