Latest news with #automobiles
Zawya
21 hours ago
- Automotive
- Zawya
Despite tariffs, it's still America first for Asia's legacy automakers
SEOUL/TOKYO - Toyota and Hyundai Motor may have a beef with U.S. protectionism, but they have one thing in common with President Donald Trump: when it comes to global car markets, it's America first for Asia's legacy automakers. Trump's tariffs on imported automobiles have upended the outlook for the global industry, yet the U.S. remains by far the most important market for Japan's Toyota, South Korea's Hyundai and Asian rivals including Honda and Nissan. North America accounts for at least 40% of the revenue at both Toyota and Hyundai, filings show. The market's importance is unlikely to change any time soon, industry insiders and analysts said, especially with China, now the world's biggest auto market, dominated by homegrown electric vehicle makers such as BYD. Those Asian legacy carmakers with more robust margins and a strong hybrid lineup - such as Toyota, Hyundai, Kia Corp and to a lesser extent Honda - are more likely able to weather the U.S. tariffs storm, and potentially take market share from weaker players like Nissan, analysts said. "The environment that we're in now is becoming increasingly harsh and uncertain, starting with U.S. tariffs," Mazda executive officer Noriyuki Takimura told reporters at an event in Tokyo last week. Mazda aims to strike a balance between "defensive" measures like cost-cuts and "offensive" ones like strengthening its product lineup, he said. Two Hyundai insiders and two Japanese auto executives separately told Reuters they had no intention of downsizing their U.S. businesses in response to tariffs, even as they acknowledged the difficulties ahead. All four spoke on condition of anonymity. The U.S. is Toyota's biggest market in terms of vehicles. It sold 2.3 million vehicles there in 2024, including its Lexus brand, accounting for more than a fifth of its global total. As a source of revenue, North America was second only to Japan in the last financial year. Hyundai's North American revenue was the highest in almost a decade last year. Kim Chang-ho, an analyst at Korea Investment & Securities, estimated it generates around 60% of its profits from the U.S., thanks to higher vehicle prices. Mocked in the U.S. in the 1980s for its perceived shoddy quality, Hyundai doubled down there around a decade ago, especially after tensions between Beijing and Seoul and the rise of domestic EV makers saw it start to lose ground in China. "After years of putting in effort, our brand is finally gaining recognition in the United States," one of the Hyundai insiders said. "So we will not take our hands off the U.S." 'GAME OF CHICKEN' The U.S. has seen a surge in demand for hybrids as consumers have become more concerned about the battery range, price and charging hassles of EVs. Fuel-efficient models such as hybrids will be a key driver to gaining market share, said Morningstar analyst Vincent Sun. Toyota, Hyundai and Kia have particularly strong hybrid offerings. So far, most legacy Asian automakers have avoided raising prices in the U.S. and stronger players are likely to continue to hold off doing so, despite lower profitability, analysts said. Instead, the focus will likely be on taking market share from lower-margin rivals like Nissan and Stellantis, analysts said. 'It will shape up like a game of chicken," said Kim Sung-rae, an analyst at Hanwha Investment & Securities. "Those who will hold up well will emerge as winners.' Over time, tariffs could be a catalyst to help drive consolidation in the industry, or at least deepen existing tie-ups. Investors wonder if tariffs could push Nissan to revive merger talks with Honda that fell apart this year. Mazda, which is 5.1% owned by Toyota, and Subaru, which is 21% owned by Toyota, could become more reliant on the bigger company. MORE INVESTMENT? While Hyundai and Kia have three U.S. factories, they still import about two-thirds of the vehicles sold there. Toyota manufactured 1.3 million vehicles in the U.S. last year, equal to 54% of the vehicles it sold there. Japanese automakers have invested more than $66 billion in U.S. manufacturing since the 1980s, building some two dozen plants, according to the JAMA auto lobby group. At a White House event attended by Trump in March, Hyundai announced a $21 billion investment plan, including a new steel factory, and a plan to boost U.S. production capacity to 1.2 million vehicles a year. The tariffs are likely to encourage Japanese and South Korean automakers to invest more into expanding production capacity and localising supply chains to protect their positions, said Justinas Liuima of research firm Euromonitor International. They will also continue to benefit from one aspect of U.S. protectionism: higher tariffs on Chinese EVs, which means they don't face the same Chinese competition in the U.S. that they do in emerging Asian markets, Liuima said. China ships very few cars to the United States, which imposed a 100% tariff on imported Chinese EVs under the previous administration of President Joe Biden. One of the Japanese executives said it wasn't a matter of simply boosting U.S. production, as high costs, especially of labour, would also weigh on profitability. "It is really a game-changer," Julie Boote, analyst at Pelham Smithers Associates in London, said about the potential longer-term tariff impact. Some automakers have held off giving guidance that takes into account tariffs for the full year, meaning investors may be in store for a rude awakening as companies adjust forecasts as they report quarterly earnings, she said. "There's lots of talk that it's already priced in. I don't really think it is."
Bloomberg
a day ago
- Automotive
- Bloomberg
Lucid's CEO Warns of Price Hikes Even for American-Made Cars
The head of Lucid Group Inc. warned that President Donald Trump's tariffs will drive up costs to build automobiles — even in the US. The industry's global supply chain means domestic manufacturers still have to import raw materials and some parts from other countries, interim Chief Executive Officer Marc Winterhoff said in an interview with Bloomberg Television on Monday.
Reuters
2 days ago
- Automotive
- Reuters
European shares fall on Trump's new tariff threats on EU and Mexico
July 14 (Reuters) - European shares fell on Monday, led by automobiles, as the U.S. President Donald Trump's latest threat to impose steep tariffs on the European Union and Mexico kept investors on edge. The pan-European STOXX 600 index (.STOXX), opens new tab was down 0.6% at 544.3 points, as of 0706 GMT. Other regional indexes also declined, barring the UK's FTSE 100 (.FTSE), opens new tab, which was up 0.2%. Trump on Saturday threatened to impose a 30% tariff on imports from the EU and Mexico starting August 1, after weeks of negotiations with major U.S. trading partners failed to reach comprehensive trade deals. In response, the EU said on Sunday it would extend its suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement. Adding to the trade turmoil, on Monday, Italy's Foreign Minister Antonio Tajani said in a newspaper interview that the EU has already prepared a list of tariffs worth 21 billion euros ($24.5 billion) on U.S. goods if the two countries fail to reach a deal. In the market, European automobile shares (.SXAP), opens new tab fell 1.4%, while retail sector (.SXRP), opens new tab was down 1%. Among individual stocks, AstraZeneca (AZN.L), opens new tab rose 1.9% after the drugmaker said its drug Baxdrostat met all the main and secondary goals of a late-stage study in patients with uncontrolled or treatment-resistant hypertension.
Yahoo
2 days ago
- Automotive
- Yahoo
European shares fall on Trump's new tariff threats on EU and Mexico
(Reuters) -European shares fell on Monday, led by automobiles, as the U.S. President Donald Trump's latest threat to impose steep tariffs on the European Union and Mexico kept investors on edge. The pan-European STOXX 600 index was down 0.6% at 544.3 points, as of 0706 GMT. Other regional indexes also declined, barring the UK's FTSE 100, which was up 0.2%. Trump on Saturday threatened to impose a 30% tariff on imports from the EU and Mexico starting August 1, after weeks of negotiations with major U.S. trading partners failed to reach comprehensive trade deals. In response, the EU said on Sunday it would extend its suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement. Adding to the trade turmoil, on Monday, Italy's Foreign Minister Antonio Tajani said in a newspaper interview that the EU has already prepared a list of tariffs worth 21 billion euros ($24.5 billion) on U.S. goods if the two countries fail to reach a deal. In the market, European automobile shares fell 1.4%, while retail sector was down 1%. Among individual stocks, AstraZeneca rose 1.9% after the drugmaker said its drug Baxdrostat met all the main and secondary goals of a late-stage study in patients with uncontrolled or treatment-resistant hypertension. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
2 days ago
- Automotive
- Forbes
Britain's Ambassador Says Trump Will Be ‘One Of The Most Consequential Presidents In American History'
Donald Trump listens to Peter Mandelson's remarks on a trade deal between U.S. and U.K. in the Oval ... More Office of the White House on May 8, 2025. (AP Photo/Evan Vucci) Peter Mandelson, the U.K.'s ambassador to the U.S., hailed a major transatlantic trade deal for automobiles, while expressing effusive praise for President Donald Trump. Speaking to the Sunday Times, Mandelson pointed out that British autos are currently enjoying a 17.5% competitive advantage over vehicles made in the EU. And such a deal wouldn't have been possible if the U.K. had remained a part of the European Union. 'We lost many other things by leaving, but we get the chance to do this deal. So there's some positives,' the ambassador said. The U.K. reached a trade deal with the U.S. in May that saw tariffs reduced from 27.5% to 10% for the first 100,000 British autos imported each year. The baseline tariff of 10% remains in place for most other imports, and are likely 'here to stay,' Mandelson said in the interview, 'but there is plenty of scope in different sectors.' The two nations are continuing their negotiations over reducing steel tariffs, and Mandelson said he's also pushing for a technology deal. Mandelson's appointment as ambassador to the U.S. sparked concerns within the Trump administration over his past meetings with top-level figures in China and the client list of his consultancy, Global Counsel. He had also previously described the president as 'a danger to the world' in remarks that he later admitted were 'ill-judged and wrong.' Mandelson told the Sunday Times that Trump is a 'more nuanced figure than people appreciate.' 'Look, he's not only a unique politician–he's also going to be one of the most consequential presidents in American history,' the ambassador said. 'He has this sense of history, this grasp of power which I think perhaps recent inhabitants of the White House haven't quite seen. 'He is not a man for endless seminars and thinking. He's not a victim of analysis paralysis. He has a very quick, easy way of grasping the core points about an issue. And let's be honest: more often than not, there's a kernel of truth in everything he says.' Mandelson pointed to Trump's crackdown on immigration as an illustration of this. "If you take immigration, for example, people feel that the work of ICE [Immigration and Customs Enforcement]"Allowing anyone from anywhere in the world to fly in and simply pass into the United States—and fan out across the country without any control or management! The public wouldn't stand it." And Mandelson can see similarities between Trump's efforts and those of the current Labour government. In May, Prime Minister Keir Starmer announced plans to to 'take back control of our borders and close the book on a squalid chapter' of rising inward migration. He outlined how the government plans to introduce restrictions across all forms of visas to stem the flow of people entering the U.K. In February, the U.S. president accepted an invitation from King Charles for an unprecedented second state visit to the U.K., becoming the first American president to be granted such an honor. Many pundits regarded the invitation as a savvy move by London aimed at renewing the 'special relationship' between the U.K. and the U.S., which Mandelson described as an 'economic lifeline built on flows of trade and investment.' Having arrived in Washington six months ago, Mandelson replaced career-diplomat Karen Pierce, who was known as the "Trump whisperer" for building close ties to the president. Mandelson, a former cabinet minister and Brussels commissioner, said the warm greeting the president gave to him when he first entered the Oval Office was the turning point in his efforts to engage with the Trump administration. 'I've never been in a town or a political system that is so dominated by one individual,' he said. 'Usually, you're entering an ecosystem rather than the world of one personality. But he is a phenomenon. A unique politician.'
