Business was already difficult for auto parts manufacturer Assashuhi Tekko, but its President has a simple message for Donald Trump with the American car tariff due to cutting this week: “Give me a break.”
The company’s 425 workers are some of the 5.6 million Japanese people who are directly or indirectly employed in the auto sector that are now afraid of their future.
“There is no point in learning only two or three months ago,” said the company president Tatsuya Kimura said at the factory of Asahi Tekko in Hekinen, Central Japan.
“Clearly, I want to say: ‘Give me a break’,” Kimura, a former engineer of Toyota, Kimura, the chief customer of his current firm, told AFP.
At the plant, where the noise of the clanging metal fills air, robot arms and machine tools, bus produces exact brakes, engines and transmission components.
The factory is in Japan’s Industrial Heartland, Aichi region, where the world’s largest vehicle manufacturer is the global headquarters of Toyota by sale.
Auto is one of Japan’s biggest success stories for decades.
Last year’s vehicles were about 28 percent of the US-bound exports of 21.3 trillion yen ($ 142 billion) in the country, and about eight percent of all Japanese jobs are connected to the region.
Impact
But rising costs, hard emission rules, a global change towards electric vehicles and a shrinking and aging Japanese population have put pressure on the industry over the years.
Honda and Nissan recently abandoned efforts to merge.
The US President announced last week that it would implement 25 percent of the duties on imports of all vehicles in the country from April 3 – after that he is for years of unveiling the comprehensive measures against business partners who say that he is for years of being “burst”.
For Japan, it is despite a conversation between Trump and Prime Minister Shigeru Ishiba in February, with “a new golden age for US-Japan relations” was seen a joint statement.
Japanese companies are also the largest investors in the United States. Trump’s policies, Ishiba said that last week, “difficult to understand”.
To compensate for tariffs, firms such as Toyota, Honda and Nissan will increase prices for American consumers, potentially kill their vehicles demand – and in detail for parts.
It may fall on the top of a potential global recession, triggered by unexpected American policies.
The tariff “will reduce auto production, reduce confidence, and reduce orders”, Moody’s Analytics said in a report about Japanese’s commercial spirit.
“Looking at the long and complex supply chains in car construction, the effect will wave through the economy,” it said.
And Natixis economist Kohei Iwahara told AFP: “Some big companies can actually transfer their production abroad, and will result in small auto part companies.”
Uncertainty pair
Takeshi Sasaki, president of the Hokuriku Light Metal Industry, said that rapid global changes towards electric vehicles are forcing manufacturers of some Japanese parts to find out opportunities outside the region.
Located in the Sitama region near Tokyo makes special parts for vehicles under research and development for brands including Hokuriku, Honda and Suzuki.
But now it is trying to develop parts for industrial robots so that its future can be ensured, he told AFP.
“EVS requires less parts than internal combustion engine vehicles,” Sasaki said.
“Now we have this tariff. It adds uncertainty at the top of uncertainty that we already had. Forex is a risk. The US economic approach is at risk.” He said.
The Kimura firm is also trying to develop a new business that provides to improve the emissions and how to improve efficiency.
“I am afraid that there will be many suppliers who would suffer and go to red if the vehicle production was to fall in quantity.
“I think each suppliers must work very hard to survive,” Kimura said.
“I didn’t expect (Trump) to go to this far.
“Now that it is happening, we just have to move forward and do the same thing as we need.”
(This story is not edited by NDTV employees and auto-generated from a syndicated feed.)
