Japanese carmakers see strong U.S. sales growth due to high demand

In April, Toyota Motor Corp., Honda Motor Co., and two other Japanese automakers experienced a surge in U.S. vehicle sales, totaling 464,372 units, reflecting an 11.8 percent increase compared to the previous year. The boost in sales can be attributed to a rush of consumers purchasing vehicles before potential price hikes resulting from an additional tariff on imported cars imposed by U.S. President Donald Trump on April 3. Subaru Corp. and Mazda Motor Corp. are particularly vulnerable to this tariff, with a significant portion of their vehicles, around 50 percent and 70 percent respectively, imported from Japan. Toyota and Honda also import a smaller fraction of vehicles from Japan, with Toyota sourcing over 20 percent and Honda less than 1 percent.

In response to the tariff, customers anticipating price increases hurried to buy hybrid and sport-utility vehicles from these automakers. This increased demand resulted in a significant sales boost; however, industry experts predict that this trend may lead to a decline in future demand, with the market outlook appearing somewhat grim. Despite this uncertainty, Toyota witnessed a 10.0 percent rise in sales, with 233,045 vehicles sold, driven primarily by strong demand for the Camry hybrid model.

Similarly, Honda experienced an 18.1 percent increase in sales, totaling 137,656 vehicles, fueled by the popularity of the CR-V hybrid SUV model. Subaru also saw a modest 0.3 percent increase in sales, reaching 56,011 vehicles, mainly due to steady demand for the Crosstrek SUV model. Mazda, on the other hand, witnessed a substantial 21.0 percent sales growth, with 37,660 vehicles sold, driven by strong sales of the CX-90 model.

While these sales results are undoubtedly positive for the Japanese automakers, the industry remains cautious about the long-term implications of the additional tariff. The unexpected surge in buying activity may create challenges for future sales performance, potentially impacting the overall market dynamics. Despite these challenges, the Japanese automakers have demonstrated resilience and adaptability in navigating the rapidly evolving dynamics of the U.S. auto market. The coming months will reveal the extent to which these sales trends are sustained and whether additional strategies are needed to navigate the evolving trade landscape.