Toyota (TM) is the most successful Japanese auto brand in America.
The company is second in annual sales in the U.S., only behind General
Motors. It is well ahead of hometown favorites Ford and Stellantis. Honda is also in the top five.
Of the 2.4 million vehicles Toyota sold worldwide in the first quarter of
FY 2026, nearly 800,000 of those sales came from North America,
making it Toyota’s most important region by far.
Related: Toyota is stuck in neutral after the latest US and Japan trade update
North American new vehicle sales rose by 89,000 units to 794,000.
However, thanks to President Donald Trump’s tariffs, profitability in the U.S. also took a
huge hit. Toyota’s operating income in North America fell by $1.1 billion
from a profit a year ago to a net loss of $438 million.
North America was the only one of Toyota’s six operating regions to lose
money. However, due to a $4.4 billion profit in Japan and a $1.1 billion
billion operating profit across Asia, Toyota was able to report an overall
quarterly profit of $5.8 billion, down from the $8.5 billion it reported a
year ago.
Japanese automakers toe a fine line with price increases
This week, Nikkei Asia reported that Japanese automakers are “passing
some of the expense of U.S. tariffs through to American car buyers, a
change from their strategy of absorbing impact.”
The Wall Street Journal reported earlier this year that President Trump told CEOs not to raise prices in the face of tariffs. He has denied telling them that, even though he went on social media in May to tell Walmart to “EAT
THE TARIFFS.”
Automakers have been reticent to blame tariffs for any price increases
this year, so the Nikkei’s report was surprising.
Related: Ford Motor Co. has a much bigger issue than tariffs at its door
But representatives from Toyota, Honda, and Nissan denied the report, telling CNBC that
any price increases this year were seasonal and not the result of the
tariffs.
The president has said, “The message is congratulations, if you make your
car in the United States, you’re going to make a lot of money…because
if you make your car in the United States, there is no tariff.”
But Ford, a company that makes 77% of its vehicles in the U.S., still
says tariffs on autos and auto parts will cost it more than $2 billion this year.
Japanese autos have a large manufacturing footprint in the U.S.
The Japan Automobile Manufacturers Association (JAMA) says its
members have spent $4.6 billion on research and development in the
U.S.
Between April 2024 and March 2025, Toyota alone built 1.96 million
units in the U.S.
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For comparison, General Motors, the country’s largest automaker, says
it needs to invest $4 billion over the next two years to increase its U.S.
production to 2 million annually.
Last month, the U.S. lowered auto tariffs on Japan to 15% from 27.5%,
but the country is still feeling the pain.
Japan’s exports posted the largest monthly drop in about four years in
July, falling 2.6% year over year in value terms.
According to one estimate, Japan exported $40.76 billion worth of cars
to the U.S. in 2024, representing nearly 19% of all auto imports.
Related: Latest tariff deals leave US automakers in a tough position
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