TOKYO (Reuters) - Japanese automotive components maker Denso Corp (6902.T) said on Tuesday that it expects to take a hit of up to 80 billion yen ($719 million) this year if the United States raises auto tariffs, Japanese media reported.
Denso, the biggest supplier to Toyota Motor Corp (7203.T), said U.S. tariffs on aluminum and steel would likely hurt profit by around 2 billion yen, adding that this was already factored into expectations, according to Jiji news agency.
A hike in tariffs on autos and auto parts to 25 percent would impact profits “by 70 billion to 80 billion yen for the full year, as much as 40 billion yen 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 390 billion yen, up from an initial estimate for 376 billion yen as it expects cost reductions and savings from increased production volumes to curb year-on-year losses.
In the year to March, the company now expects operating profit to ease 5.5 percent from a year ago.
Other Japanese suppliers are also feeling the pinch of U.S. trade restrictions with fellow Toyota group supplier Aisin Seiki Co (7259.T) saying that steel and aluminum tariffs had raised its costs by “nearly 1 billion yen” annually, according to Kyodo news.
($1 = 111.3000 yen)
Reporting by Tokyo Newsroom