Denso Unperturbed by Trump Tariffs, May Raise Prices
Denso, the world's second-largest automotive parts manufacturer, remains unconcerned by President Trump's impending tariffs on Mexico and Canada. The Japanese company intends to mitigate potential cost increases through price adjustments, as revealed by CFO Yasushi Matsui.
Matsui emphasizes the need for "sound price transfers" rather than absorbing additional costs within the supply chain. Denso hopes to engage in price negotiations with customers if tariffs are imposed.
The company's positive third-quarter performance serves as an indicator for its parent company, Toyota, which will report earnings shortly. Another Toyota supplier, Toyota Boshoku, is also monitoring the situation closely. CFO Shunichi Iwamori expresses a willingness to discuss passing on higher costs to customers.
Denso and Toyota Boshoku prioritize local production in North America to minimize the impact of tariffs. Matsui acknowledges the potential benefits of a weakened Mexican peso, as lower currency values can enhance profitability. Additionally, anticipated corporate tax cuts by President Trump are expected to have positive effects.