Mitsubishi Motors falls on steep drop in quarterly profit

Mitsubishi Motors Corp. shares fell the most in almost four months after reporting an operating profit that fell short of projections, even as the Japanese carmaker said it will see some relief from reduced tariffs on US car imports.The stock dropped as much as 9.7% in early morning trading in Tokyo on Friday after reporting an 84% decline in operating profit to ¥5.6 billion ($38 million) for the April-June period, compared with the ¥13.2 billion predicted, on average, by analysts. Even so, the Japanese automaker still expects ¥100 billion in operating income for the fiscal year ending March 2026, despite weak sales.
Reduced tariffs, as outlined in President Donald Trump’s trade pact with Japan, will ease but not completely lift the burden on the nation’s automakers, according to Kentaro Matsuoka, Mitsubishi Motors’ chief financial officer.
“We expect it will mitigate the impact, but the tariffs that took effect in April have already started to affect our sales,” Matsuoka said at a briefing Thursday. “It’s a positive in that tariffs are lower than initially expected but this doesn’t mean we can let our guard down.”Mitsubishi Motors had been bracing for a ¥40 billion hit from the 25% tariff on cars and car parts imported to the US that Trump had been touting since earlier this year. That rate was lowered to 15% in the deal Trump announced on Wednesday, which offered some relief and much-needed clarity for Japan’s major automakers, several of whom had begun on-shoring production or raising prices in the US.
Honda Motor Co., for example, postponed its $11 billion EV supply chain expansion in Canada and said it will move production of the hybrid Civic model to the US from Japan, while Subaru Corp. is reviewing all of its investments.Read More: Toyota Leads Share Gains on Trade Deal With 15% Cars Tariff

With tariffs now at 15%, the gross industry impact is projected to be around ¥1.9 trillion, Goldman Sachs Japan Co. analyst Kota Yuzawa wrote in a note, a downward revision from the investment bank’s previous estimate of around ¥3.5 trillion under 25% tariffs.

The trade deal didn’t include an exemption for Japan from a 50% tariff on imported steel and aluminium good,s however, according to a report from the country’s national broadcaster NHK.

In June, Mitsubishi announced it would raise prices in the US for three models by an average of 2.1% as part of a regular adjustment that includes measures to counter inflation.

The US is the biggest export market for Japanese carmakers, with $40.8 billion of vehicles sold there last year. In addition, many Japanese models are imported from factories in Canada or Mexico.

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