An Angry Japan Responds To Trump's Toyota Taunts

Tyler Durden's picture

After Trump's Thursday morning twitter taunt targeted Toyota, when the President-elect warned Japan’s biggest carmaker that it will face heavy penalties if it chooses to make cars for the US market in Mexico, writing  "Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax", a tweet which sent shares of Japanese carmakers sliding on Friday with a 1.7% fall for Toyota, 2.2% for Nissan and 3.2% for Mazda, an angry Japanese government and corporate establishment pushed back against Trump’s criticism of Toyota as the attack on the country’s most powerful corporate name sent shockwaves across "Japan Inc."

As the FT notes, CEOs of Japanese companies including Sony’s Kazuo Hirai and Nissan’s Carlos Ghosn weighed in, while analysts feared the president-elect’s targeting of Toyota would lead to a broader fallout on Japan-US trade relations, similar to concerns about an escalating trade war between the US and China.

“Toyota is responsible for large employment at US plants such as in Kentucky. It’s questionable whether the new US president has a grasp of how many vehicles Toyota builds in the US,” said Taro Aso, Japan’s finance minister.  Hiroshige Seko, minister for trade and industry, added that the Japanese government would do its part to explain to the US administration about the contribution of the country’s car industry to the US economy.

“Toyota is equivalent to Japan as a whole, so Mr Trump’s criticism could be interpreted as a message to the Japanese government,” said Koji Endo, motor industry analyst at SBI Securities, expressing concerns about the impact on bilateral trade negotiations once Mr Trump is officially appointed later this month.

Analysts said Trump’s focus on Toyota, after Ford this week announced that it would pull plans for a $1.6bn Mexican plant, is not surprising but ironic for the Japanese carmaker who was the latecomer among global rivals in shifting production to Mexico. They noted that Toyota, which has an existing manufacturing facility in Baja to build the Tacoma pick-up truck, only made about 6% of 2.2m vehicles sold in the US in Mexico during the January to November period, compared with 33% for Nissan and 47 per cent for Mazda, according to SBI Securities, both of which companies are said to be far more exposed to Trump's future ire than Toyota.

As the FT adds, in 2015, Toyota announced plans to spend $1 billion building a new facility in the central state of Guanajuato that will make Corolla vehicles from 2019.

The decision was a symbolic one for Akio Toyoda, Toyota’s chief executive, as it marked the lifting of a three-year moratorium on plant construction. It also underscored the company’s recovery since Mr Toyoda faced a US congressional grilling in 2010 in the wake a massive recall of spontaneously accelerating Toyota vehicles.

 

Having experienced the US recall crisis and the subsequent political backlash, analysts say Toyota may eventually adjust its strategy in Mexico, either by reducing the planned number of vehicle production or increasing the capacity of existing US plants in Texas or Mississippi.

“The company will carefully try to avoid taking action that would leave a negative impression on the new US administration,” said Masahiro Akita, analyst at Credit Suisse. “Considering how Toyota has operated in the past, it wouldn’t be surprising if the company makes a policy shift.”

In response to Trump’s tweet, Toyota has said no US jobs would be lost as a result of its planned new plant in Mexico. CEO Toyoda also said the company would “see what policies the incoming president adopts” before deciding whether to take action.

Still, Mr Akita said a complete reversal of Toyota’s plan to construct a new plant in Guanajuato was unlikely considering Mr Toyoda’s concerns about the impact on employment and the regional economy.

* * *

Then again, the Trump twitter effect may soon fizzle according to Reuters Breakingviews, which noted that Toyota’s day in Donald Trump’s crosshairs "could mark peak Twitter-Trump."

On Thursday, the U.S. president-elect threatened tariffs on the Japanese carmaker, if it sold Mexico-made Corollas in the United States. Yet a 2 percent fall in Toyota’s Tokyo-listed shares looks muted considering Ford and General Motors performed as poorly or worse on New York trading. That’s because it quickly became clear Trump had all his facts wrong. The more that happens, the less impact his tweet storms will have.

Trump’s bully pulpit, both online and at rallies, can certainly be effective. General Motors, Lockheed Martin and Boeing have all scrambled to respond. This week Ford ditched a plan to build a new plant in Mexico that Trump had slated.

 

In Toyota’s case, a 35 percent import tax on 200,000 Corollas built annually at its new plant in Mexico would add $1.4 billion to their overall cost, assuming a $20,000 sticker price per car. That’s around 10 percent of this year’s expected earnings, which either Toyota or customers would have to swallow.

 

That’s never going to happen, though, for one very simple reason: Toyota’s new plant would replace one in Canada, not America. All Corolla production for U.S. sales remains in the company’s Mississippi factory. The plant is also in Guanajuato, not Baja, as Trump asserted.

 

Getting such basic facts wrong might not bother Trump’s supporters. But shareholders are more likely to get wise to such antics and start focusing on more concrete issues.

 

Contrast Toyota with Constellation Brands, the $30 billion alcoholic drinks firm. Its shares dropped more than 7 percent on Thursday, despite strong earnings. The maker of Corona and other Mexican brews faces higher costs if tax breaks are scrapped for overseas costs. That’s a central tenet of tax reforms sought by congressional Republicans and Trump. And these would be easier to put in place than long-term cross-border tariffs, which break trade agreements.

 

None of this means Trump’s ability to micromanage via social-media bullying is over. But the more his punches fall wide of the mark, the more inclined investors will be to ignore him.

While that may eventually pan out, for now the market (and various Trump tweet scanning apps) is far more transfixed by what Trump tweets in his daily social media sermons than even statements made by many if not all Fed members.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Stu Elsample's picture

Better worry about cleaning up that nuke waste instead of spouting off about OUR President.

Haus-Targaryen's picture

Toyotas are such interesting cars.  

The overwhelming majority are painfully and unnecessarily boring.  They are however like cock-roaches and more or less impossible to kill.  

I have an 06 Lexus with 171k on the clock and literally nothing breaks on it.  Sometimes a squeak here or there, but good Lord I drive it like I stole it and change the oil every 7k and the thing just keeps going and going and going.  

Once Japan becomes completely irradiated (joke) maybe Toyota moves to Germany and builds some love-child car with BMW.  Scary reliability and good lucks while still being fun to drive. 

Stu Elsample's picture

I would really like to drive my 8000 lb. American made diesel pickup right over one of those Prius cockroaches (especially the ones driven by limp wristed leftist faggot snowflakes who cut me off)

Haus-Targaryen's picture

Have you done the EGR bypass? 

I've seen some guys hook-up a 12v fishtank pump from their diesel tank to drop diesel right after the cats.  

Get in front of them, flip a switch, put it in neutral and step on the gas.  

Arnold's picture

Smoking.

This DEF shit is annoying. Extra time and money for no good reason.

https://en.wikipedia.org/wiki/Diesel_exhaust_fluid

CJgipper's picture

That's why you buy a 99 CTD.  Mine is straight 4" from the manifold, through the turbo, to the tip with a 48" donaldson muffler.  Yes, 48".  You hear nothign but the turbo whistle and rush of air.

The DEF is annoying, but the DPF's are just pure trouble.  I'd delete every bit of that crap if I bought a newer one.  But the old one just keeps going, and going, and going...... 

wren's picture

“Toyota is equivalent to Japan as a whole, so Mr Trump’s criticism could be interpreted as a message to the Japanese government,”

Ok, message to Japanese government then... And awesome if you manufacture cars in the US, we will simply tax the cars you import so that your Corolla made in Mexico now costs more than your Tacoma made in the US.

hound dog vigilante's picture

 

My Jeep '06 Liberty CRD got 23mpg stock/fresh fom the factory.

mods
Better+cheaper air intake
Better+cheaper air/turbo hoses 
straightened+widened exhaust
EGR delete
engine & tranny chips re-programmed

ALL OF THESE mods COULD/SHOULD HAVE BEEN PART OF THE STOCK/FACTORY SPEC (i.e. cheaper & better) 

I now get 30mpg, no issues.

 

The poor efficiency elements that are delivered w/ new (esp. american) vehicles are astounding. EPA/regs/terrible engineers/bean-counters conspire to ensure that US vehicles are as inefficient as possible when they leave the factory...

Stu Elsample's picture

Mine is a 5.9 Cummins made before the EPA enforced EGR BS was added...no worries. That's a good idea with the smoke maker trick. I'm about to put an electric cutout right before the converter and have the dump pipe amied out the side. Should be fun annoying Prius drivers with their windows down.

cowdiddly's picture

Mine too. and Its not for sale. that little 5.9 Cummins was the best diesel engine they ever made for a LT and its been wearing out Dogde pickups ever since.

Building smoke it just tricks for kids and stoopid if you want longevity. You can keep building a bigger fire in them until things start to give. My freind did until he actually stretched the headbolts. The old ones in good shape are getting hard to come by.

Kept close to stock and these are MILLION mile engines with proper care. Cummins has a million mille club website. over 800 pages of high miler happy owners longing in some unbelievable mileage. You get a fender badge at 300K and a watch at a million.

Mine has 269K and can still pull a house off its foundation.

 

Stu Elsample's picture

Yep. Take care of the engine, and don't mod it...it will last forever. No chips...no cams...no stacked turbos...nothing...but i will replace the stock pusher pump mounted inside the tank with one that is accessible

cowdiddly's picture

Yes thats the only flaw as it starves the injector pump which get a bad rap but are actually pretty good.Its they have diodes inside the pump that are kept cool by the actual fuel. AT WOT and less the lift pump will never be providing enough to keep it cool and will burn them out over time.

Its that chicknshit gocart lift pump. I replaced with a Fass pump with filters on the frame and a fuel pressure guage in the dash and never looked back, Only mod I ever made.

Haus-Targaryen's picture

Everytime I go state-side I toy with the idea of getting one of these and shipping it back.  I figure it would last my entire life if taken care of.  

cowdiddly's picture

Exactly. Thats the 2004. Thats the last year of the good models my friend. mine is 2001 but I have a friend with an 04 with 500k and they are good-uns. after that? not so much. common rail fuel sys and 4k injectors, blue shit, egr, different engine ect. injectors for that are 80 bucks.

CheapBastard's picture

"Wasabe and Tapanyaki no like Trump putting American people first."

However, Americans love The Donald---created more jobs in 57 days then Soweeto in 8 years!

hound dog vigilante's picture

 

Most '05 Rams got the 5.9, too.  I would say '05-'06 were the last good models...

CJgipper's picture

FYI, the VP44 main injection pump starving is actually the dodge lifter pump failing.  Change it to a frame mounted FASS or raptor pump while bypassing the block mounted dodge pump, and you'll never have another main injection pump issue.

hound dog vigilante's picture

 

Funny how there seems to be a disproportionate number of diesel runners here @ ZH.  People who do things for themselves (& give a shit about efficiency) tend to run diesels...  makes sense.

 

 

Stu Elsample's picture

5.9s were installed in early '07s too. They're hard to find

Muddy1's picture

@ Stu,

Hilarious, you make a comment above about your awesome 8,000 pound truck, but then admit it can be passed by a Toyota Hybrid Prius.  Maybe you shouldn't admit so much.

jcaz's picture

Well, he neglected to point out that he was also towing three of your Priuses while drag racing the Prius....

 

Stu Elsample's picture

You silly illiterate faggot stooge...who said anything about racing a Prius??? If i was to race one, the Cummins would leave that ugly wind up toy in the dust. Trust me on that.

actionjacksonbrownie's picture

Alas, I drive the lowly F350 with the 6.0 - is that considered a diesel or something else?? I keep a paper bag handy and put it on whenever I pull out of the driveway. The police think it's funny. Me? mmmm not so much.

hound dog vigilante's picture

 

Cummins 5.9 - best truck engine around.  My '05 Ram was bulletproof.

 

 

Why Cummins+Ram(or GM or FORD) don't drop a 4or6cyl. 2.9-3.9 diesel into a light/medium-duty PU truck is beyond me...  

a small PU that gets 35mpg+ & runs for 500k ???  They'd sell like hotcakes.  Every contractor & landscaper would collect a fleet of them...

The Saint's picture

Or just get in front of a Prius and roll some smoke with your deisel.  They will crash trying to navigate through it.

 

Ecclesia Militans's picture

In Afghanistan, I watched a Toyota 4-runner burried in an avalanche during winter on the Pamir Plateau get dug out after two months, start and drive away,  With a crushed roof.  The guys who dug it out had to clear almost 2 meters of snow before they got it out of the gravel and rocks that had originally buried it.  The Afghans pounded out the roof with hammers to somthing resembling normal, and it was still in use two years later.

I saw a purple Corolla with a JuffyLube sticker from Falls Church, VA still in the windshield from like 5 years earlier drive through the Kabul River just east of the Kabul Military Training Center, on the road to Jalalabad.  The river water came up and over the hood.  The car never stopped and rolled right up the muddy bank on cheap unmatched Chinese tires and just kept driving.

In Iraq, our company kept a B6 (Landcruiser with up-armor) that had been hit by an IED and an RPG7 simultaneously.  The RPG rocket was fired too close to the vehicle so it didn't have time to arm, but the rocket was still stuck in the passenger-side rear window, and after the IED the front end was swapped for one from another damaged vehicle.  Pictures of the vehicle, before and after, were hung in the entrance to the Camp Sather DFAC for years.

I'm not trying to be overly-critical of your 8,000 lb. diesel truck, but I saw those over there as well.  Along with Mercedes G-Wagons stuck in the moon dust up to their running boards and every brand of US-made truck broken down, busted up, and ragged out ten ways from Sunday.  When it comes to war, I'll take a Toyota High Lux with a 2 liter diesel engine and standard transmission.

post turtle saver's picture

this is all very likely true and my experience with the hi lux / Tacoma / 4runner has been very similar... it's amazing the punishment they can take and still keep running... hands down the very best tactical you can have in a war zone, bar none...

CJgipper's picture

Light weight, large surface area tread is king in the sand.  It's all about being able to stay on top.

Cautiously Pessimistic's picture

Same for me.  Have (well my son now has it) a 1997 Lexus LS400.  That car drives like it was 3 or 4 years old, and yet it turns 20 years old this year!  Great car.  A few issues, but an exceptionally well engineered car.  Just a little over 100k on it now.  Bought it with 54k.  It was literally a 'little old lady car'.

inhibi's picture

Correction: Old - pre 2007 Toyota's are built like bricks. The ones these days? Made as cheaply as possible.

 

The reason why your 06 lexus keeps running is that it had about twice as thick a clutch plate than the ones made today. And the clutch plate was made from a single die-cut slab. Nowadays, to save cost, they combine hundreds of small pieces to form the plate, often times magnitudes thinner than before. The reason for this is simple: engineered expiration date. Every car made today is engineered to last 7 years or 100k miles.

 

So hold onto your old lexus, Ford pickup, 90's volvo. These durable cars are a thing of the past.

earlyberd's picture

I second that, pre-2007 Toyotas are practically immortal, and I own two myself. It seems like the auto industry collapse of 2008 caused manufacturers to start cutting costs in the most dangerous ways possible, and I suspect a lot of it has to do with reducing weight to meet fuel efficiency targets.

Case in point, I stupidly leased a 2013 Prius C for my city commutes, and driving that thing felt like I was rolling down the street inside of an empty soda bottle. Great gas mileage, sure, but the preponderance of plastic left me worrying about it falling apart, so I promptly got rid of it once the lease ended. I'm much happier with my used Lexus.

hannah's picture

the 'japanese made' toyotas are impossible tokill. the mexican ones are pretty iffy. some are good and others just fall apart....same for mercedes

lil dirtball's picture

>"It’s questionable whether the new US president has a grasp of how many vehicles Toyota builds in the US,”

It's further questionable whether the new US president has a grasp on anything other than his smartphone and Ivanka's privates.

I'm tellin' you Trumptards, I wouldn't get too excited just yet. He looks like a fresh orange roughy, but there's a certain odor ... .

stocker84's picture

That odor is lingering from when he grabbed your mother right in the pussy.... And she let him...

Oldwood's picture

Regardless of how many are made here, how many  MORE are imported into our country?

It's called balance of trade.

Something we have not had in many decades, and while it might appear sustainable..... It's NOT.

lil dirtball's picture

>Something we have not had in many decades...

Exactly. This shit show has been carefully constructed - painstakingly constructed - over decades. Centuries, even. And, whether it's sustainable or not, does any rational person believe that (((they))) are gonna let some yahoo push the history erase button and go in some 'undesirable' direction? NFW. (((They))) would have taken him out at the knees by now. (Although, my bet is that they still might make it look that way, since a crash is coming like it or not.)

(((That agenda))) has been in play for centuries and ol' Donald is just another face on the wall of carefully chosen CEO's who answer to (((the board))).

jcaz's picture

The Japanese excel at this shell game-   "But, but- we make Toyotas in the United States"-

Yeah, and WHY is that, EXACTLY?   Oh-  POLITICS.

How many Fords and Chevys are being built in Japan right now?   Or EVER?

Bueller?

Hal n back's picture

when teh japanese car cos started up here in hte 70's and 80's, the states ran to them to give the tax breaks and lians etc to locate i ntheir states, while legasy companies her got nothing. In addition the import companies mostly avoided unions. So costs stil remained low and the legasy companies helped pay for that.

its all politics and a rep or senator saying he or she brought jobs to the state with littel concern over the cost and long term effect.

Back in the 90's I ws part of a team at companiy I was at buying a mexican company--daily wage was less than hourly waage, benefits wholly different and virtually no regulations--the compaany poured waste water, tainted, into a stream.

 

we are not on the same competitive page as other coutnries and untill we bring that into line-either they increases costs or we decrease, we wil have a huge disconnect in this global society.

1980XLS's picture

Fuck Toyota, Fuck Japan.

When they play fair, they might have something to complain about.

 

"We hope the U.S. government will send a clear message that any future trade policy with Japan must ensure a level playing field and not come at the expense of American workers,” Hinrichs said.

 

http://www.japantimes.co.jp/news/2016/01/26/business/corporate-business/...

 

SoDamnMad's picture

Toyota is doing just fine selling pickups to ISIS. I want to see a picture of a car-ship docked somewhere near there with the cars rolling down the ramp with the big black flags. I wonder if you cn get a pair of those 23mm aircraft guns in the bed of the truck as a factory option?

ParkAveFlasher's picture

I'd wager GM moved more autos into the hands of jihadis via Cash for Clunkers than Toyota sold in new.

duo's picture

Remember, Toyota is pulling up stakes in CA and moving to N. Texas, I assume to be closer to their new plants in Mexico, but why build in Baja if your HQ is in TX?
Toyota has a huge plant in San Antonio.

post turtle saver's picture

the San Antonio plant can't ship out Tundras fast enough... each one has a sticker in the back window 'made in Texas' and you see them everywhere down here... damn fine truck, too...

Hal n back's picture

assume its to get away from California taxes

corporate and individual-I think 1500 of the 3k employees are going to Texas.

alfaafla's picture

Ever think of that maybe we weren't playing fair in the first place? High taxes are their response to how we are responding to that response. 

Kevin Trader's picture

agree, fuck them! I dont care care whether its factory in canada or us, either increase capicity here or build new one

0hedgehog's picture

Americans have no idea what the Fukushima is going on with three meltdowns in Japan since they have shut off all radiation monitoring equipment and any information about same virtually ceased about two weeks after the tsunami destroyed the plants. We are kept in the dark with all that "free" electricity that nuclear plants were touted as giving us.

DeathMerchant's picture

I live right on the west coast (in a very small red area) and anyone with a brain here is not eating anything that comes out of the ocean.