Huan Qiu Shi Bao·2025-11-12 22:58Core Points - Japanese automakers are collectively facing significant profit warnings due to U.S. import tariffs, marking the first time since 2020 that all seven major companies reported profit declines, totaling nearly $10 billion in losses [1][2] - The impact of U.S. tariffs, yen depreciation, supply chain disruptions, and intensified competition are creating a complex environment for Japanese automotive companies, with many executives indicating that the current "severe situation" may become the "new normal" [1][2][3] Group 1: Financial Impact - The seven major Japanese automakers reported a combined profit decline of 27.2% year-on-year, with Nissan, Mazda, and Mitsubishi posting losses, while the remaining four companies also experienced varying degrees of profit declines [2] - Toyota's operating profit in Japan and the U.S. decreased by approximately $4.32 billion, with expected losses from U.S. tariffs reaching about $9.4 billion for the fiscal year, exceeding previous estimates [3] - Honda anticipates a profit reduction of around $2.5 billion for the entire fiscal year due to U.S. tariffs, with executives acknowledging that the profit decline has become a "normal" situation [3] Group 2: Tariff and Trade Agreements - The recent performance warnings from Japanese automakers come shortly after a U.S.-Japan trade agreement, where Japan agreed to invest $55 billion in exchange for a reduction of tariffs on exports to the U.S. [6] - Despite the agreement, the high tariff rates remained applicable for most of the April to September period, leading to an estimated total profit loss of over ¥2.5 trillion for the fiscal year [6] - Executives express concerns that even a reduced tariff rate of 15% will further erode already thin profit margins, with fears that tariffs may persist beyond the current administration [6][8] Group 3: Market Challenges - The Japanese automotive industry is facing multiple challenges, including an unexpected depreciation of the yen, which is currently around 154 yen to the dollar, exceeding initial forecasts [9] - Supply chain disruptions, particularly in semiconductor availability, have led to production halts in various factories, further complicating the operational landscape for Japanese automakers [10] - The competitive landscape is intensifying, especially in the Chinese market, where Japanese brands have seen their market share drop significantly, from 24.1% in 2020 to 11.6% recently [11]