TOKYO: Five of Japan’s seven major automakers have suffered drops in their consolidated net profits for April-September, according to their latest earnings reports.

Notably, Nissan Motor Co. experienced a year-on-year plunge of 93.5 pct to 19.2 billion yen. Meanwhile, net profits fell by 26.4 pct, 19.7 pct, 67.3 pct and 43.8 pct at Toyota Motor Corp., Honda Motor Co., Mazda Motor Corp. and Mitsubishi Motors Corp., respectively.

They struggled in China, where the electric vehicle market is expanding rapidly, and fared poorly in the North American market.

In addition, uncertainty is rising for the auto industry due to U.S. President-elect Donald Trump’s plan to raise tariffs on imported vehicles from Mexico.

For the first half of fiscal 2024, Nissan logged a 90.2 pct decline in operating profit on its failure to respond to the rapid sales growth for hybrid vehicles in North America.

Nissan will cut 9,000 jobs globally, or about 7 pct of its entire workforce. President Makoto Uchida told a press conference that the company made the decision with “the deepest regret.”

Increased sales incentives paid to dealers in the growingly competitive North American market weighed on automakers’ earnings as well.

Mazda Chief Financial Officer Jeffrey Guyton said that his company will remain in a tough situation for the time being. Mitsubishi Motors CEO Takao Kato said that automakers are engaging in a sales incentives battle.

In China, so-called new energy vehicles, including electric vehicles, have spread rapidly, intensifying price competition among Japanese and Chinese automakers. Mazda said that it struggled in the new energy vehicle segment.

Honda Executive Vice President Shinji Aoyama said that the pace of its auto sales decline in China was “faster than expected.” The automaker will rush to take steps such as cutting production capacity.

On the other hand, Suzuki Motor Corp., which does not sell four-wheeled vehicles in the U.S. or Chinese market, saw its net profit jump 43.9 pct to 217.4 billion yen. President Toshihiro Suzuki said that its efforts to improve profits have started to take effect.

Automakers with production bases in Mexico may suffer a huge blow if the United States under the next Trump administration imposes hefty tariffs on imported vehicles from the southern neighbor. Nissan’s Uchida expressed hope that his company will hold related discussions with other automakers that have bases in Mexico.

JIJI Press