“Nissan” is the most affected car company from Trump customs duties

The Japanese automobile company “Nissan” is likely to be one of the largest victims of possible customs duties that President Donald Trump may impose on Mexico and Canada, according to Yahoo Finance.

The third largest car maker in Japan

It is unclear whether the US President will implement his promise to impose a 25% fee after approval of the tax delay for 30 days on Monday, but the reaction will be deep for the third auto maker in Japan, who is struggling to transfer himself strongly, with talks to integrate with “Honda “.
The United States is the largest sales market for Nissan and its two competitors “Toyota” and “Honda”. The three Japanese auto manufacturers make some of their most famous American models in Canada or Mexico, the two countries covered by sanctions.
As such, analysts and industry experts said that the impact of customs duties would be great on the three companies.
Also read: “Nissan” is threatened with declaring bankruptcy after the demobilization of thousands of workers around the world

Toyota and Honda are more prepared

But Toyota and Honda are more willing to bear customs duties – whether in terms of financing or their ability to raise prices and pass some customs duties costs to consumers.
“The problem lies in Nissan, which barely earns the money from the auto industry, as many of the models that the company manufactures in Mexico to export to the United States are more tight cars such as Centra that target consumers who are watching The cost and those who cannot bear the high prices easily. “
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“Whenever the duration of customs duties, I think it may pose a major threat to Nissan. In the end, if the merger is carried out, this may pose a burden on Honda as well.”
The company said on January 22 that it could not predict the possible changes in policies and its impact, but it continues to focus on providing high -quality vehicles and will adapt as needed.

A complete loss of operating profits

Hong is estimated that Nissan will face a full loss of operating profits unless action is taken in response to customs duties – such as the redirect of Mexico cars to other markets such as Brazil, price raising or production reduction.
Nissan gets about 27% of its sales in the United States from Mexico, compared to about 13% for Honda and 8% for Toyota, according to S & B Global Mobilyte.
The German company “Volkswagen”, which represents Nissan has a long history in Mexico, has some of the largest exposure factors against Trump and its policies, with 43% of its sales in the United States from Mexico, according to the estimates of “Standard & Poor’s Global Mobelliti”.

A new burden on “Nissan”

For Japanese automobile companies, Trump’s move would transform for a long time an industry – low -cost production base near the United States – into a new burden.
Nissan has produced cars in Mexico since 1966 when it opened its first factory outside Japan and then finally followed by: Toyota, Honda and Mazda.
As a CEO of a Japanese auto company other than April said
As a CEO of a Japanese car manufacturer other than April said: “In the case of affordable cars, if the full tariff is added to the price, consumers will not want to buy. For example, 10% are added to the price of the car and the company bears the rest.”

Another option for “Nissan”

The official added that since production cannot be easily stopped in Mexico, there will be another option to sell manufacturers there to the Latin American markets or other places.
The problem facing Japanese car manufacturers did not miss the attention of its South Korean competitor “Hyundai”, which has no factories in Mexico or Canada.
Hyundai’s financial manager recently said that even if Trump imposes customs duties on all markets outside the United States, the South Korean auto manufacturer does not expect to be severely affected like its Japanese competitors.
“This would complicate the integration process that is already difficult to carry out,” said Christopher Richter, a great analyst in the Japanese auto sector at the CLSA brokerage company.
Nissan and Honda are scheduled to announce more details about the proposed deal by mid -month.
The two companies seek to cooperate by 2026, which may represent a historical turning point for the Japanese auto industry and emphasize the threat posed by Chinese electric car makers on traditional car manufacturers.