Toyota Motor Corp is warning its US dealers that the US government’s proposed tariffs on Mexican imports could increase auto parts costs by more than US$1 billion and hurt sales of its top-selling truck.
Trump’s threat to impose tariffs on Mexican goods might boost expenses by US$215 million to US$1.07 billion, the Japanese automaker told dealers in a letter seen by Bloomberg.
The mid-sized Tacoma could suffer, because 65 percent of the pickups sold in the US are imported from Mexico, the memo said.
Toyota planned to deliver 246,000 Tacoma models this year, including 160,000 assembled in Tijuana, Mexico, it said. The remainder are produced at a factory in San Antonio, Texas.
Toyota executive vice president for North America Bob Carter sent the letter to US dealers late on Monday, saying the added cost projections are “rough estimates” and the full implications for the auto industry remain unclear.
“This is not just an issue for our company. These tariffs will have an effect industry-wide,” Carter said in the letter, which noted that General Motors Co is the largest automotive importer from Mexico.
He added that Toyota remains hopeful negotiations between the US and Mexico on trade and immigration policy would lead to a deal that can be “resolved quickly.”
News of the letter was first reported on Tuesday by Reuters.
The notice to dealers comes as Toyota has taken an unusually public stand against the White House’s trade policy, saying last month that threats of tariffs on vehicle and auto parts imports from Japan sent a message to the company that its billions of dollars of investments in the US are not welcome.
Those shifts in US trade policy were flagged as a key risk in Toyota Motor Credit Corp’s annual 10-K report filed on Tuesday.
“Our business is substantially dependent upon the sale of To-yota and Lexus vehicles in the US. Changes in the volume of sales may result from governmental action or changes in governmental regulation or trade policies,” including “changes in import fees or tariffs on raw materials or imported vehicles,” the Toyota financial unit said in its filing.
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