Trump tariffs potential death knell for Japan automakers

Somewhere in the world, presumably Beirut, Carlos Ghosn is having a serious case of schadenfreude.

The Nissan-Motor-CEO-turned-international-fugitive is seeing shares plunge 47% during the current CEO’s five-year tenure. Not only did Makoto Uchida trail Japan’s Topix index by more than 100 percentage points.

He’s now Nissan’s worst-performing leader since at least 1974.

But Nissan’s stumble isn’t happening in a vacuum, as Japan’s other auto giants can attest.

In 2019, the company was still reeling from Ghosn’s arrest on financial misconduct charges and escape. Now, Nissan and its Japanese peers confront the rise of a Chinese auto industry shaking up the global market.

Or, as Michael Dunne, CEO of auto industry advisory ZoZoGo, calls it, the “great China car blitzkrieg.” As Dunne notes “the sudden flood of Chinese cars is upending decades of stable market shares and profits.”

And that’s putting an even bigger target on China Inc’s back as Donald Trump returns to the White House to make trade wars great again.

A literal explosion in competition from China, particularly in the electric vehicles space, is putting intensifying pressure on Japanese manufacturers.

The process of accelerating EV production has been slow, at best. So has prodding Japan Inc.

CEOs loosen their grip on the hybrid vehicle market that the nation has long dominated and pivot to EVs.

“China will export a stunning 6 million cars to more than one hundred countries this year, cementing its position as the world’s No 1 exporter,” Dunne says.

The average price of those made-in-China cars: US$19,000. “That’s less than half the average price of a new car in America and Europe,” Dunne adds.