Denso said on Tuesday it expects to take a hit of up to JPY80bn (US$719m) this year if the US raises auto tariffs, Reuters reported, citing Japanese media.
Denso, the biggest supplier to Toyota, said US tariffs on aluminium and steel would likely hurt profit by around JPY2bn, adding that this was already factored into expectations, the Jiji news agency said, according to Reuters.
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A hike in tariffs on autos and auto parts to 25% would impact profits “by JPY70bn to JPY80bn for the full year as much as JPY40bn of which we will see in the first half,” Jiji quoted Denso executive director Yasushi Matsui as saying.
Denso raised its forecast for full year operating profit to JPY390bn, up from an initial estimate for JPY376bn as it expects cost reductions and savings from increased production volumes to curb year on year losses.
In the year to 31 March, 2019, the company now expects operating profit to ease 5.5% from a year ago.
Other Japanese suppliers are also feeling the pinch of US trade restrictions with fellow Toyota group supplier Aisin Seiki saying steel and aluminium tariffs had raised its costs by “nearly JPY1bn” annually, Reuters cited Kyodo News as reporting.
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By GlobalDataSee also: Denso Q1 2018 revenue surge 14.3% at JPY1,331.2bn
