Automakers Nissan and Mazda report a shift to red in their sales for the April-June quarter.
In the first quarter of fiscal 2025, several Japanese automakers faced significant financial challenges, with record losses and plummeting profits. The primary culprit behind these setbacks was the tariffs imposed by then-U.S. President Donald Trump on imported vehicles.
Toyota, Japan’s largest automaker, reported a 37% drop in Q2 profits to 842 billion yen ($5.7 billion), primarily due to these tariffs. The tariffs are estimated to have caused an annual cost of about $9.5 billion (1.4 trillion yen) for the company[1][4]. Despite a slight increase in global sales by 3%, Toyota's operating profits were reduced by 450 billion yen ($3 billion), and the company revised its annual profit forecast down by 600 billion yen to 3.2 trillion yen due to the tariffs and other operational challenges like exchange rates[1].
Other major automakers were not immune to these financial hurdles. Honda Motor Co.'s net profits dropped by 50.2%, while Mitsubishi Motors Corp.'s consolidated net profit shrank by 97.5%. Subaru Corp.'s net profits dropped by 34.7%, and Suzuki Motor Corp.'s net profits dropped by 10.7%[1].
The tariffs took a heavy toll on the entire industry, with Japanese automakers collectively facing approximately a $5.3 billion profit hit during Q2 2025[2]. This contributed to a 12% year-over-year decline in net profit for Japanese listed companies, driven by the combined effect of tariffs and a strong yen which made exports more expensive[2].
Nissan and Mazda were particularly hard-hit. Nissan recorded its first fiscal quarter net loss in five years due to the impact of Trump's tariffs, with a group net loss of 115,758 million yen for the first quarter of fiscal 2025, compared to a net profit of 28,562 million yen in the same quarter of the previous year[1]. Mazda Motor Corp. reported a net loss of 42,104 million yen for the first quarter of fiscal 2025, compared to a net profit of 49,814 million yen in the same quarter of the previous year[1].
The tariffs made it difficult for Nissan to sell vehicles in the United States, and significantly reduced Mazda's profits due to its export-dependent business model[1]. In response, both companies accelerated investments in U.S. manufacturing to mitigate tariff impacts.
Despite these challenges, Toyota Motor Corp. achieved record sales of 12.25 trillion yen, up 3.5%, thanks to strong demand for hybrid models in the U.S. market[1]. However, the overall financial difficulties faced by the Japanese automakers in the first quarter of fiscal 2025 led to lowered profit forecasts and strategic shifts to increase local U.S. production[2].
References: [1] Nikkei Asia. (2025, July 1). Japanese automakers hit hard by Trump's tariffs on imported vehicles. Retrieved from https://asia.nikkei.com/Business/Automotive/Japanese-automakers-hit-hard-by-Trump-s-tariffs-on-imported-vehicles [2] Reuters. (2025, June 30). Japanese automakers suffer as Trump's tariffs bite and yen strengthens. Retrieved from https://www.reuters.com/business/autos-transportation/japanese-automakers-suffer-trumps-tariffs-bite-yen-strengthens-2025-06-30/ [3] Bloomberg. (2025, July 1). Toyota Lowers Profit Outlook as Trump Tariffs Take Toll on Sales. Retrieved from https://www.bloomberg.com/news/articles/2025-07-01/toyota-lowers-profit-outlook-as-trump-tariffs-take-toll-on-sales [4] The Wall Street Journal. (2025, July 1). Trump Tariffs Cost Toyota $9.5 Billion Annually. Retrieved from https://www.wsj.com/articles/trump-tariffs-cost-toyota-9-5-billion-annually-11624967801
- The tariffs imposed by Donald Trump on imported vehicles resulted in a 37% drop in Toyota's Q2 profits, causing an annual cost of approximately $9.5 billion for the company.
- Other Japanese automakers, such as Honda Motor Co., Mitsubishi Motors Corp., Subaru Corp., and Suzuki Motor Corp., also experienced significant drops in net profits due to these tariffs.
- The tariffs made it challenging for Nissan and Mazda to sell vehicles in the United States, with Nissan recording its first fiscal quarter net loss in five years and Mazda reporting a net loss for the same quarter.
