Japan’s Major Carmakers to Review Production Bases After Trump Win; Mexico Manufactured Vehicles Could be Hit by Tariffs

The Yomiuri Shimbun

21:00 JST, November 8, 2024

Major Japanese carmakers, whose main market is the United States, are wary about possible U.S. policy changes by President-elect Donald Trump.

Trump, who is aiming to bring manufacturing back to the United States, has announced that all vehicles manufactured in Mexico will have a 200% tariff imposed on them. At present, such vehicles are subject to no such tariff if they meet certain requirements due to a trade agreement between the United States and Mexico. Many Japanese carmakers have set up manufacturing bases in Mexico and export their cars to the United States from there.

Honda Motor Co. produces about 200,000 cars in Mexico annually and exports about 80% of them to the United States.

“If tariffs were imposed permanently, then we would have to think about manufacturing cars in a country that is not subject to them,” said Honda Vice President Shinji Aoyama.

Nissan Motor Co. sold about 900,000 vehicles in fiscal 2023, 24% of which were produced in Mexico.

“Our mid- to long-term direction won’t change, but I’d like to watch the situation closely,” said Nissan President Makoto Uchida at a press conference on Thursday.

Trump has indicated a policy of reexamining the preferential measures for electric vehicles introduced by the administration of President Joe Biden. This may be beneficial to Japan, which excels in hybrid cars. Some Japanese companies expect long-term growth in the number of electric vehicles in the United States and have begun preparations for setting up manufacturing bases of such vehicles in the country.

Major Japanese carmakers continue to struggle in the Chinese market and with the U.S. market growing increasingly uncertain, there are rough seas ahead.