New Toyota vehicles will be on display in the sales lot at Hanley’s Hilltop Toyota in Richmond, California on March 4, 2025.
Justin Sullivan | Getty Images
The newly announced US tariffs on car imports rattle Asian carmakers and put pressure on businesses ahead of their duties later in the week.
US President Donald Trump announced last Wednesday that he would wipe out 25% tariffs on cars “unmade in the US” and send shockwaves through global automakers.
Toyota’s shares fell 9.4% in the three sessions since the announcement, while Nissan fell 9.3%. South Korea’s Hyundai lost 11.2%.
According to Vivek Vaidya, global client leader in mobility at research firms Frost & Sullivan, Japanese automakers are particularly in a disastrous strait, and Toyota could be the worst hit due to the huge US sales.
According to the US auto market, Asian automakers accounted for six of the top eight American automakers in sales volume in 2024. Toyota sold 1.98 million vehicles a year, beating domestic heavyweights Ford and Chevrolet to the top.
Japan Honda and Nissan They were in fourth and fifth place, respectively, while they were Korean brands. Hyundai Kia took two spots: Subaru I came in the 8th place.
The company’s latest financial statements reveal that it generates a large portion of its revenue from North America.
Toyota and Nissan told CNBC that they would not share any immediate opinions with them, but the other four did not respond to requests for comment.
According to Reuters, the US imported $474 billion worth of automotive products in 2024.
The S&P Global Mobility Report on March 27 revealed that South Korea was the second-largest car exporter to the US in 2024, with 1.4 million vehicles shipped, lagging behind Mexico’s 2.5 million, and Japan exported 1.3 million.
“In a nutshell, the US is an irreplaceable market for Asian car manufacturers. The market leaders in Japan and South Korea will have a major impact on this (tax) announcement,” Vaidya said.
Joe McCabe, president and CEO of Autoforecast Solutions, said that even if automakers wanted to move production to the US to avoid tariffs, moving the factory would cost billions, rather than a “overnight proposal.”
Richard Kaye, portfolio manager for Asset Management Group Comgest, told CNBC that heavyweights such as Toyota and Nissan have large production facilities in the US, but they cannot increase enough to offset tariffs.
“The idea that they can remove Mexicans, and to some extent, Canada’s supply from the Canadian supply chain is ridiculous. They face higher prices in the US due to tariffs. And the big question for them is, I’ll either swallow it or ask to swallow it or maybe swallow it.”
However, Kaye has a slightly different view from Frost and Sullivan’s Vaidya. He said that being Toyota is the biggest player is probably the best way to get through tariffs. “But there’s no way they can have this impact without affecting their revenues. It’s going to hurt,” he added.
He identifies the bright location of Asian car maker space, namely Suzuki, a Japanese car maker.
Kaye points out that companies that do not sell cars in the US see fares better than their peers’ shares.
Suzuki More than 1% was seen as of Monday, compared to Toyota’s 16.45% loss and Nissan’s nearly 21% decline. Hyundai and Kia have seen losses of nearly 7% and 8% respectively.
Since Suzuki doesn’t sell cars to the US, the tariffs on the company are “zero,” Kay said. “Suzuki is an Indian drama and is a very exceptional company in this field.”
