Japanese automakers slashed US export prices by 19%, the biggest drop since records going back to 2016, sacrificing margins to remain competitive through the tariff turmoil.
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KIM KYUNG-HOON
Toyota Motor Corp. and Honda Motor Co. earnings will paint a mixed picture as a stronger yen and US auto tariffs eat into profit, despite resilient unit sales.
Toyota likely saw a dip in first-quarter operating profit, according to estimates. While the company posted record global sales in the first half driven by a surge in pre-tariff purchases, Bloomberg Intelligence said the automaker is likely weighed down by factors including supply chain costs.
Honda’s profit likely fell for the same reasons, according to BI. In June, Japanese automakers slashed US export prices by 19%, the biggest drop since records going back to 2016, sacrificing margins to remain competitive through the tariff turmoil.
Japan’s chief trade negotiator Ryosei Akazawa on Friday said it will keep pressing the US to cut tariffs on cars and auto parts to 15% as promised in a trade deal.
Japan’s defense sector will also be in focus, as rising government spending will support sales and margin growth at Mitsubishi Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd.
Tariff-related pressures are expected to weigh on Kawasaki Heavy’s power-sports segment, while its defense unit is projected to drive margin expansion, Jefferies analyst Sho Fukuhara said. Profit margins at Mitsubishi Heavy’s aircraft, defense and space business could exceed targets, supported by a gradual recovery in Boeing 787 production, BI said.
More stories like this are available on bloomberg.com
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Published on August 4, 2025
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