Latest news with #KokiAkimoto
Miami Herald
2 days ago
- Automotive
- Miami Herald
Detroit Big 3 benefit from auto tariffs now, but time is running out
U.S. tariffs are taking a toll on Japan's economy. Exports from the Far-East island nation fell in May for the first time in eight months, mainly due to declines from stalwarts like Toyota, Nissan, and Mitsubishi. Autos accounted for about 28% of Japan's total 21 trillion yen ($145 billion) of export goods in 2024. So when exports to the U.S. fell 11.1% in May, you can bet a lack of cars leaving the Nagoya port played a big role. Related: Toyota makes surprising move to beat Tesla in key market According to government data, total exports declined 1.7% year over year by value to 8.1 trillion yen. While the decline was felt, it was much better than the median 3.8% decline analysts expected after exports rose 2% in April. U.S.-bound automobile exports fell nearly 4%. "The value of automobile exports to the U.S. fell, but their volume did not drop that much," Daiwa Institute of Research economist Koki Akimoto told Reuters. "This indicates Japanese automakers are effectively shouldering the tariff costs and not charging customers." Meanwhile, U.S. automakers have taken advantage of the situation, leveraging their domestic manufacturing footprints to offer incentives. While Ford, Stellantis, and General Motors have all said that tariffs will shave billions from their EBITDAs this year, they are still in a better position than the Japanese automakers, who, after dominating the U.S. market for decades, now have to pay 25% duties. U.S. auto dealers, including those with Japanese brand names, have actually benefited over the short term from tariffs. Dealers have a front-line view of the U.S. auto market, which appears to be at an inflection point," said Cox Automotive Chief Economist Jonathan Smoke last month. "The recent sales pace has been a positive, lifting current market sentiment higher for franchised dealers." Buyers have been motivated by the threat of tariffs raising prices in the coming weeks. And sellers have been fueling that demand with incentives. Ford, for instance, has been running its "From America, For America" campaign to provide customers with employee pricing. Related: Car buyers should shop these brands for the best tariff deal "It's really paid off for us in the last 60 days. You've seen a lot of the results in the market. Last month (May)...we actually posted a 14.7% share here in the U.S. That's up 1.9 points of share on a year-over-year basis. A lot of times in this industry we fight for tenths of share, and to have a 1.9% increase year over year was very strong," said Ford Blue and Model e President Andrew Frick. In March, Japan Automobile Manufacturers Association (JAMA) Chairman Masanori Katayama said, "We will be looking at how to absorb short-term shocks and what concrete measures we can take to deal with these shocks, as well as how to deal with them in an all-Japan manner. On June 17, Prime Minister Shigeru Ishiba said following the G7 summit that Japan had yet to reach a deal with the U.S. on a tariff agreement. With a July 9 deadline for 24% tariffs looming, Japan may become more motivated to strike a deal soon. This means the slim advantage tariffs have given U.S. automakers may also soon be going away. Auto sales have climbed sharply in recent months as consumers were motivated by the incentives and the need to buy vehicles before any tariff-related price increases. But Bank of America is now saying that the growth it saw in consumer vehicle loan applications has declined from its peak in April, "suggesting that 'buying ahead' has largely run its course." More on carmakers: Popular Ford newcomer overtakes Jeep in a key areaJeep, Dodge parent has no solution for this emerging problemGeneral Motors makes $4 billion tariff move Bank of America expects lower-income and younger buyers to feel the most pain, as its data shows that median car payments have grown faster than new and used car prices since 2019. Shockingly, of those households with a monthly car payment, 20% have a payment over $1,000. In addition to capping your car payments at about 15% of your monthly take-home, financial experts also recommend shoppers aim for a 20% down payment, a 36- to 48-month loan term, and expenses (including insurance) at between 8% and 10% of your gross monthly income. Experts also recommend that you know your credit score and loan approval amount in advance and that you shop around with different lenders for the best rate. Related: Car buyers should be nervous about this emerging trend The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Qatar Tribune
2 days ago
- Automotive
- Qatar Tribune
Slump in auto exports amid tariffs hits Japan's shipments to United States
Agencies Japan's exports dropped in May for the first time in eight months as top automakers like Toyota were hit by sweeping U.S. tariffs – while Tokyo also did not manage to strike a trade deal with Washington this week – which would likely put even more pressure on a fragile economy. Japan's Prime Minister Shigeru Ishiba said after the G-7 summit in Canada on Tuesday that his country had not reached a comprehensive tariff agreement with Washington, as some disagreements persisted between the two nations despite several rounds of talks. Japan and the U.S. 'explored the possibility of a deal until the last minute,' he added. Tokyo is scrambling to find ways to get Washington to exempt Japan's automakers from 25% automobile industry-specific tariffs, which are hurting the country's manufacturing sector. Japan also faces a 24% 'reciprocal' tariff rate starting on July 9 unless it can negotiate a deal with Washington. The data on Wednesday showed that Japanese auto exports to the U.S. fell almost a quarter in May as worries over tariffs grow. Roughly 8% of jobs are tied to the auto industry in Japan, which is home to the world's top-selling carmaker, Toyota, as well as Honda, Nissan and other giants. Japan's automobile sector accounted for about 28% of the total 21 trillion yen ($145 billion) worth of goods the Asian country exported to the U.S. last year. Its total exports in May dropped 1.7% year-over-year by value to 8.1 trillion yen, government data showed, smaller than a median market forecast for a 3.8% decrease, and following a 2% rise in April. Exports to the U.S. slumped 11.1% last month from a year earlier, the largest monthly percentage decline since February 2021, dragged down by a 24.7% plunge in automobiles and a 19% fall in auto components, while a stronger yen also helped reduce the value of shipments. Exports to China were down 8.8%. In terms of volume, however, U.S.-bound automobile exports dipped just 3.9%, indicating that the biggest Japanese exporters were absorbing the tariff costs. 'The value of automobile exports to the U.S. fell, but their volume did not drop that much,' Daiwa Institute of Research economist Koki Akimoto said. 'This indicates Japanese automakers are effectively shouldering the tariff costs and not charging customers.' So far, major Japanese automakers have refrained from price increases in the U.S. to mitigate the tariff costs, except for Subaru and Mitsubishi Motors. 'They are buying time right now to see the course of Japan-U.S. trade negotiations,' Akimoto said. The absence of price hikes could affect their profits, but their fiscal base is generally solid, he added. While Japanese stocks and the yen showed little reaction to the data, shares of car companies have come under pressure this year due to concerns about the tariff impact. Automakers and other transport companies are the second-worst performers this year among the Tokyo market's 33 sector sub-indices, down almost 12%. Only makers of precision equipment have fared worse. Toyota, the world's top-selling automaker, has estimated that tariffs likely sliced 180 billion yen from its profit in April and May alone. Honda has said it expects a 650 billion yen hit to its earnings this year from tariffs in the U.S. and elsewhere. The Japan May trade data provide one of the earliest indications of how U.S. President Donald Trump's tariffs are impacting countries and the global economy. China's data showed this week that the country's factory output grew 5.8% in May year-over-year, the slowest pace in six months. And its outbound shipments to the U.S. plunged 34.5%, the sharpest drop since February 2020. The impending tariffs had driven companies in Japan and other major Asian exporters to ramp up shipments earlier this year, inflating levels of U.S.-bound exports during that period. The Japan data showed imports dropped 7.7% in May from a year earlier, compared with market forecasts for a 6.7% decrease. As a result, Japan ran a trade deficit of 637.6 billion yen last month, compared with the forecast of a deficit of 892.9 billion yen. After the G-7 summit in Canada, Ishiba told reporters that U.S. tariffs were 'hitting many Japanese companies' profits.' The situation 'could have a grave impact on both Japan and the U.S. as well as the world economy, directly and indirectly,' he warned. The hit from U.S. tariffs could add more pressure on Japan's lackluster economy. Subdued private consumption already caused the world's fourth-largest economy to shrink in January-March, the first contraction in a year. However, the smaller-than-expected drop in May shipments suggests that Japan's export driver has not stumbled, slightly raising the chance of the economy avoiding a contraction in the April-June quarter, Yuhi Kawano, economist at Mizuho Securities, wrote in a report. The tariff woes complicate the Bank of Japan's (BOJ) task of raising still-low interest rates and reducing a balance sheet that has ballooned to roughly the size of Japan's economy. The BOJ kept interest rates steady on Tuesday and decided to decelerate the pace of its balance sheet drawdown next year, signaling its preference to move cautiously in removing remnants of its massive, decadelong stimulus. According to an estimate by the Japan Research Institute, if all the threatened tariff measures against Japan were to take effect, U.S.-bound exports would fall by 20% to 30%. Some economists say those duties could shave around one percentage point of the nation's gross domestic product (GDP).
Gulf Today
2 days ago
- Automotive
- Gulf Today
Japan's exports post first drop in 8 months as tariffs hit auto firms
Japan's exports fell in May for the first time in eight months as big automakers like Toyota were hit by sweeping US tariffs, and the failure of Tokyo to clinch a trade deal this week will likely pile pressure on a fragile economy. Prime Minister Shigeru Ishiba said after the Group of Seven summit in Canada on Tuesday his country had not reached a comprehensive tariff agreement with Washington as some disagreements persisted between the two nations. Japan and the US 'explored the possibility of a deal until the last minute,' he added. Tokyo is scrambling to find ways to get Washington to exempt Japan's automakers from 25 per cent automobile industry-specific tariffs, which are hurting the country's manufacturing sector. Japan also faces a 24 per cent 'reciprocal' tariff rate starting on July 9 unless it can negotiate a deal with Washington. Japan's automobile sector accounted for about 28 per cent of the total 21 trillion yen ($145 billion) worth of goods the Asian country exported to the US last year. Its total exports in May dropped 1.7 per cent year-on-year by value to 8.1 trillion yen, government data showed, smaller than a median market forecast for a 3.8 per cent decrease, and following a 2 per cent rise in April. Exports to the US slumped 11.1 per cent last month from a year earlier, the largest monthly percentage decline since February 2021, dragged down by a 24.7 per cent plunge in automobiles and a 19 per cent fall in auto components, while a stronger yen also helped reduce the value of shipments. Exports to China were down 8.8 per cent. In terms of volume, however, US-bound automobile exports dipped just 3.9 per cent, indicating that the biggest Japanese exporters were absorbing the tariff costs. 'The value of automobile exports to the US fell, but their volume did not drop that much,' Daiwa Institute of Research economist Koki Akimoto said. 'This indicates Japanese automakers are effectively shouldering the tariff costs and not charging customers.' So far major Japanese automakers have refrained from price increases in the US to mitigate the tariff costs, except for Subaru and Mitsubishi Motors. 'They are buying time right now to see the course of Japan-US trade negotiations,' Akimoto said. The absence of price hikes could affect their profits, but their fiscal base is generally solid, he added. While Japanese stocks and the yen showed little reaction to the data, shares of car companies have come under pressure this year due to concern about the tariff impact. Automakers and other transport companies are the second-worst performer this year among the Tokyo market's 33 sector sub-indices, down almost 12 per cent. Only makers of precision equipment have fared worse. Toyota 7203.T, the world's top-selling automaker, has estimated that tariffs likely sliced 180 billion yen from its profit in April and May alone. Honda 7267.T has said it expects a 650 billion yen hit to its earnings this year from tariffs in the US and elsewhere. Reuters
Time of India
3 days ago
- Automotive
- Time of India
Japan's exports post first drop in 8 months as auto firms hit by US tariffs
Japan 's exports fell in May for the first time in eight months as big automakers like Toyota were hit by sweeping U.S. tariffs, and the failure of the Asian nation to clinch a trade deal this week will likely pile pressure on its fragile economy. Prime Minister Shigeru Ishiba said after the Group of Seven summit in Canada on Tuesday his country had not reached a comprehensive tariff agreement with the U.S. as some disagreements persisted between the two nations. Japan and the U.S. "explored the possibility of a deal until the last minute," he added. Tokyo is scrambling to find ways to get Washington to exempt Japan's automakers from 25 per cent automobile industry-specific tariffs, which are dealing a blow to the country's manufacturing sector. Japan also faces a 24 per cent 'reciprocal' tariff rate starting on July 9 unless it can negotiate a deal with Washington. Japan's automobile sector accounted for about 28 per cent of the total 21 trillion yen ($145 billion) worth of goods the Asian country exported to the U.S. last year. Its total exports in May dropped 1.7 per cent year-on-year by value to 8.1 trillion yen, government data showed, smaller than a median market forecast for a 3.8 per cent decrease, and following a 2 per cent rise in April. Exports to the U.S. slumped 11.1 per cent last month from a year earlier, the largest monthly percentage drop since February 2021, dragged down by a 24.7 per cent drop in automobiles and a 19 per cent fall in auto components, while a stronger yen also helped reduce the value of shipments. Exports to China were down 8.8 per cent. In terms of volume, however, U.S.-bound automobile exports dipped just 3.9 per cent, indicating that the biggest Japanese exporters were absorbing the tariff costs. "The value of automobile exports to the U.S. fell, but their volume did not drop that much," Daiwa Institute of Research economist Koki Akimoto said. "This indicates Japanese automakers are effectively shouldering the tariff costs and not charging customers." So far major Japanese automakers have refrained from price increases in the U.S. to mitigate the tariff costs, except for Subaru and Mitsubishi Motors. "They are buying time right now to see the course of Japan-U.S. trade negotiations," Akimoto said. The absence of price hikes could affect their profits, but their fiscal base is generally solid, he added. Japanese shares and the yen showed little reaction to the data. The Japan May trade data provide one of the earliest indications of how U.S. President Donald Trump's tariffs are impacting countries and the global economy. China's data showed this week that the country's factory output grew 5.8 per cent in May from a year earlier, the slowest pace in six months. And its outbound shipments to the U.S. plunged 34.5 per cent, the sharpest drop since February 2020. The impending tariffs had driven companies in Japan and other major Asian exporters to ramp up shipments earlier this year, inflating levels of U.S.-bound exports during that period. The Japan data showed imports dropped 7.7 per cent in May from a year earlier, compared with market forecasts for a 6.7 per cent decrease. As a result, Japan ran a trade deficit of 637.6 billion yen last month, compared with the forecast of a deficit of 892.9 billion yen. DRAG ON GDP The hit from U.S. tariffs could add pressure on Japan's lacklustre economy. Subdued private consumption already caused the world's fourth-largest economy to shrink in January-March, the first contraction in a year. However, the smaller-than-expected drop in May exports suggests that Japan's export driver has not stumbled, slightly raising the chance of the economy avoiding a contraction in the April-June quarter, Yuhi Kawano , economist at Mizuho Securities, wrote in a report. The tariff woes, though, complicate the Bank of Japan 's task of raising still-low interest rates and reducing a balance sheet that has ballooned to roughly the size of Japan's economy. The BOJ kept interest rates steady on Tuesday and decided to decelerate the pace of its balance sheet drawdown next year, signalling its preference to move cautiously in removing remnants of its massive, decade-long stimulus. According to an estimate by the Japan Research Institute, if all the threatened tariff measures against Japan were to take effect, U.S.-bound exports will fall by 20 per cent-30 per cent. Some economists say those duties could shave around 1 percentage point of the nation's gross domestic product. ($1 = 145.3200 yen)
