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Subaru, Toyota expect ‘big impact’ from US tax

Subaru (Pic By Bloomberg)

By BLOOMBERG

TOKYO • Subaru Corp reported a sales slide in the US, its largest market, and predicted a “big impact” from US President Donald Trump’s proposed tariffs on imported vehicles following the escalation of a global trade war.

Unit sales in the US dropped about 14% to 149,800 vehicles in the three months through June 30, the company said in a presentation yesterday. For the year that ended in March, only half of the 670,900 vehicles it sold in the US were produced locally, meaning that the remaining units, imported from Japan, would be subject to any additional import taxes put in place by the Trump administration.

Subaru joins its largest shareholder Toyota Motor Corp in warning about repercussions from a potential US auto import tariff, echoing sentiments from global peers, including General Motors Co.

Amid escalating tensions with trading partners from Canada to Europe and China, the US Commerce Department is probing whether imports of passenger vehicles imperil national security, and Trump has threatened a tariff on autos and parts of as high as 25%.

“It’s a fact that there would be a big impact from a US tariff increase,” Subaru CFO Toshiaki Okada said at a briefing in Tokyo. “We’re studying what the impact might be, but there are too many unknowns at this point, so we want to refrain from giving a specific figure.”

The company is also examining how it can control spending on incentives in the US, Okada said.