TOKYO - Japanese automakers are under increasing pressure as China’s aggressive push in electric vehicles continues and the impact of U.S. tariffs under former President Donald Trump looms large. With total tariff-related losses for seven major manufacturers projected to reach 1.5 trillion yen, analysts are examining how Japanese companies plan to stay competitive.
Automotive industry expert Takaki Nakanishi of Nakanishi Research offered his analysis of the sector’s outlook and Japan’s potential “winning formula.”
Nakanishi noted that Japanese automakers collectively earned a robust 7.4 trillion yen in operating profit last year, despite facing heavy tariffs of around 2.5 trillion yen. He explained that even with the tariff burden, companies managed to maintain profitability, partly because the tariff rate stabilized at 15 percent instead of the initially proposed 27.5 percent. As a result, total profits of around 4.4 trillion yen are expected this fiscal year, leaving room for recovery and renewed competitiveness.
Focusing on individual companies, Toyota has revised upward its forecasts for sales and profits but still fell short of market expectations of roughly 3.8 trillion yen in operating profit. Nakanishi interpreted this as a conservative stance amid a challenging economic environment, emphasizing Toyota’s continued strength in global sales. He added that the company’s focus on strengthening its break-even management is a strategic step toward restoring its pre-pandemic earning power of 5 trillion yen.
Honda, by contrast, has downgraded its full-year forecast, citing production disruptions linked to Dutch semiconductor maker Nexperia’s China operations, which have been restricted by export controls. Nakanishi pointed out that Honda’s core four-wheel business posted an operating loss in the first half of the fiscal year, largely due to 220 billion yen in accounting losses from aggressive EV investments. Additional production cuts of 110,000 vehicles have compounded the problem. He said that while short-term recovery will be difficult, performance could improve significantly by 2027 with the launch of new hybrid models.
As for Nissan, restructuring efforts under its new management have been progressing steadily, raising expectations for a rebound next fiscal year. However, the company postponed its net profit guidance, which Nakanishi attributed to uncertainties surrounding restructuring-related losses. He suggested that while one-time losses may arise, they indicate that Nissan’s restructuring is advancing smoothly, making next year’s new model sales crucial for determining the company’s turnaround.
The discussion concluded with a look at Japan’s strategic position in the face of China’s expanding EV dominance. As Chinese manufacturers strengthen their presence in global markets, Japanese automakers are under pressure to identify and execute strategies that can secure long-term competitiveness in an evolving industry.
Source: テレ東BIZ
