Comments by "Yo2" (@yo2trader539) on "Kirk Kreifels" channel.

  1. Given the high cost of everything, it's near impossible to manufacture in North America and offer lower prices.
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  2. For big ticket items such as automobiles, labor cost difference is actually a tiny portion of the production cost. It's the other stuff that is valued by automakers when choosing a production location, everything from supply chain, transportation/logistic network, tax incentives, labor practices, availability of quality workforce, and general acceptance by local community. I recall reading in the Japanese press that Honda has always thought highly of their Canadian plant because the company appreciates the quality, consistency, and education-level of the Canadian workforce.
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  3. That must be the greatest compliment for Mazda engineers. Driving features, engine, interiors....nothing compares to the safety of the vehicle.
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  4. Tariffs are an import tax, so it's not good for anyone. The demand in recent days is mostly future demand brought forward. Given the constraints on their US production capacity, automakers won't be able to maintain the same range of models as before. US assembled models have to be carefully selected, especially as assembling in the US means higher production costs. I suspect lower margin (entry-level) vehicles will be the first to be scaled back. Total US new car sales will likely decline due to higher average prices, which also means it's not good for dealerships, banks, insurance companies, nor government revenue. To stay competitive, automakers will have to pursue further efficiency and cost reduction by acceleration of automation, reduction of workforce for each production line, and possibly lowering or simplifying specs when designing US-market vehicles.
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  5. Nisan Operating Profit is still black for FY2024 (Mar 2025 fiscal year), implying that the Net Profit/Losses are mostly impairment losses.
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  6. Much respect. You're the only who actually looks into the details of the production line. I think you're more detailed than the Nikkei Newspaper. Reportedly, Toyota Kentucky is at near full capacity, and given the uncertainty over tariffs on vehicles from Japan and Canada, there must be a lot of internal discussions. Toyota's new battery plant in North Carolina just started limited production from 2025, but I've seen media reports saying that they're only making regular hybrid batteries at the moment. From previous reports, we know that Kentucky is supposed to be the first assembly plant in North America to assemble BEVs. In other words, if Toyota were to start assembling BEVs in Kentucky, where does Toyota plan to source the batteries (especially with tariffs)? Do they wait until North Carolina is ready, or North Carolina will be made ready in conjunction with Kentucky's retooling, or would Toyota buy directly from Panasonic factories in the US or in Japan? I suspect the most logical business decision would be to keep production of the most selling vehicles in the US in the US. Toyota BEVs won't have large sales volume, at least not in the near term.
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  7. That's how the pro-EV camp criticizes and shames automakers. Each year Toyota and group companies sell about 10 million vehicles worldwide. If majority of Toyota's global customers want BEVs, Toyota will be making more of them. In reality, over 40% of Toyota's new car sales in CY2024 was in hybrid vehicles. There was such a strong interest in hybrids, particularly in North America, some customers had to wait for months. From an operational perspective, automakers cannot easily switch back their production line once they convert to (or build new) BEV lines. And it takes years of planning, preparation, and retooling to manufacture BEVs...which is also why Toyota has always been cautiously approaching BEVs. Toyota does have to sell a few BEV models to meet compliance/regulation, but global auto demand is highly polarized. Automakers that followed government mandates and succumbed to investor pressure have invested heavily in BEV facilities. Most automakers are still losing money from BEV sales, including many Chinese automakers. It doesn't make sense to gain marketshare in BEVs, when you'll be losing more money the more you sell.
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  8. Mexico is booming with near-shoring investments from Tech to auto-components, and the challenge is attracting and retaining skilled workers. They all struggle with Mexican electricity infrastructure and increasing costs. Mexico is not a cheap production site at all. For many automakers, Mexican factories provide vehicles both for North and South America, so it's a very strategic location. It's very important because Latin American is one of the weakest regions for Toyota. And you missed the most important point of this video (and the Reuters article), which is that Toyota is facing a supply-chain issue in Mexico. Currently, Toyota's production capacity is maxed out and cannot meet the full demands of their customers. Some customers are waiting months for their vehicle whether in Canada, Australia, NZ, Europe, or the US. Despite the current strong demand, Toyota had to lower their daily production target in Japan for FY2024 from 15,000 cars per day to 14,000 because they were working too hard to deliver cars. They realized they were running too fast and it was unsustainable. Toyota's operating profit margin for North America is extremely low, far below other regions. Toyota lost money in FY2022 in North America, and FY2023 was around 3% OP margin. In other words, too much money is taken by the dealership, which is independent from Toyota. Also labor cost isn't a large component in the production cost of a car.
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  9. It's been reported a while back that Toyota is aiming to introduce them for 2027/2028 models. (It usually takes 3 to 5 years to introduce a new model.) However, given the uncertainty over high-end BEV demand in North America, I don't think Toyota has a strong incentive to rush. Automakers do need to sell BEVs for regulatory and compliance reasons, but they've lowering their demand forecast for BEV segment.
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  10. Sorry to have to say this, but in Japan we don't really think highly of Korean or Chinese products. We only see Korean products as inferior know-offs of Japanese products using Japanese materials, machinery, designs, etc. But they have excellent marketing skills.
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  11. The "debt" is for autoloans. Automakers borrow money from the market (by issuing debt) and lend to customers in the form of autoloans, and they make money by charging a small interest rate difference. Thus, the more cars you sell/finance, the more debt will appear on the balance-sheet.
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  12. Always physically test the seat/car yourself. We all have different preferences on height, view, buttons, interior, space, layout, screen, etc. What bothers you may not get noticed by others and vice versa.
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  13. We have almost no tariffs on US products, so there is little room to negotiate. TPP was already ironed out during the Obama administration. And Trump 45 reneged, so US didn't join TPP. This is far beyond issues like trade. It's the beginning of the end of the alliance.
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  14.  @limitedreach4446  That is not the understanding in Japan. Nissan is in this mess because they pursued quantity over quality/profitability selling cheap cars in the North American market. They also were late to develop hybrids because they were dragged into European BEV madness. Ghosn also destroyed relationships with suppliers which is why Nissan didn't get the necessary cooperation from component and material providers like Toyota and Honda. In short, he was a terrible CEO.
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  15. I was wondering if these exemptions would allow Toyota and Nissan to "export" some vehicles to the US from their assembly plants in the UK. Under the current tariff regime, it would be cheaper than to pay 25% for vehicles imported from Mexico, Canada, or Japan. FYI, British assembly plants (i.e. workers) are known for their highest production quality among Japanese automakers. Toyota and Nissan supply cars to Europe, North Africa, Middle-east, South Africa, etc from their British assembly plants.
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  16. On aggregate, roughly 50% of components and materials used in vehicles assembled in the US are imported. The precision machinery needed for assembly plants and component factories are imported to the US. (In Tesla's factory, the robotic arms are from a German company, and gigacasting devices are made by an Italian company.) Tire and battery companies also need to import ingredients to make tires and batteries in the US. As ironic as it sounds, it may simply be cheaper for Japanese automakers to manufacture the car in Japan and just pay 25% tariffs...because everything from seats, tires, infotainment, components, materials, semiconductors purchased in the US will become more expensive going forward.
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  17. Toyota may not immediately need to raise invoice prices to dealerships until they know the full impact. What dealerships decide is a different story given that they probably won't have the same volume as before. But I do suspect all automakers will have no choice but to re-examine what to export to the US or which models to sell and assemble in the US going forward. The immediate priority would likely be to secure components for US-assembled cars. There is a long waiting period for Toyota vehicles in some countries. I would assume the most economically sensible decision would be to reallocate some Japan-assembled cars to non-US markets, especially as production in Japanese plants is at full capacity.
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  18. Import Substitution may work in theory if the US were a developing country with low labor costs, utilities, rent, tax, etc. There is no competitive reason to manufacture goods in one of the most expensive countries in the world. Apple is competitive and profitable because they don't own any factories nor are their products manufactured in the US. They just design them.
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  19. Nissan's e-Power Series Hybrid technology is uniquely different from Honda and Toyota, and arguably the most advanced in the business. They offer e-Power trims in Europe, Asia, Australia, Japan, etc. Unfortunately, Nissan was heavily under the influence of European ZEV mandate and couldn't push out more hybrids in North America due to their previous ownership structure. In contrast, about half of North American sales for both Toyota and Honda are now hybrids. Nissan is late in offering their hybrid models in North America which they plan to do in 2026/2027.
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  20. Nissan has been fighting an parasitic infection for decades.
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  21.  @faheemabbas3965  It was a decision to pull back from less profitable markets/region. European sales was weak so they decided to reduce production and later close the plant in the UK. And Australia has around 1.2 million in new car sales compared to 15-16 million in the US, so it's always a challenging market, especially since the top selling models in Australia are utes (a.k.a pick-up trucks). Honda has been in an awkward situation in which the 2-wheel motorbike segment enjoys higher profit margins than the 4-wheel automobile segment. So there has been a lot of pressure to increase the profitability of the automobile segment. To that end, Honda had to prioritize on certain markets.
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  22. The tariff rate is so punitive, it touches everything and everyone. The materials and components to build the machines used for assembling cars and components will also be under tariffs. Look at a Tesla factory production line. The Gigacasting device would be from an Italian company and the robot arms are from a German company...which are both owned by a Chinese company. Any maintenance and repair component will be under tariffs. And tire companies will need to import rubber, infotainment touch screens are coming from Asian supply chain that builds smartphones, laptops, etc.
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  23. Toyota and Idemitsu have been perfecting Solid-State Batteries for nearly 10 years now. They will give better range and performance than current batteries. Toyota plans to introduce them around 2027/2028. Most companies are still losing money on BEVs, whether it's Ford, GM, Hyundai, or the Chinese companies. The reason is the unit production cost is way too high, and the most expensive component is the battery, which is why Toyota and other Japanese automakers didn't rush into BEVs. In order to manufacture a reliable BEV for the mass market, you need a reliable battery. (Tesla only used high-grade Japanese batteries in the past, just like Toyota and Honda hybrids.) And to maximize range performance in BEVs, you need to shave weight of non-battery components since battery pack alone has a weight of a small car. The reason why Japanese automakers were and still are skeptical of BEVs is because it was Japanese electronic companies that pioneered and perfected rechargeable batteries in the 1980s and 1990s, mostly for usage in portable electronics such as laptops, cellphones, and walkmans. Japanese companies understand the convenience and limitations of rechargeable batteries more than anyone. Extreme temperatures, external shocks like collisions, stability/reliability...they still have a lot of issues. BEVs are "batteries on wheels." Thus the quality, reliability, and performance of the battery decides the overall performance of the BEV. Current battery technology is simply not at the level for mass market. Chinese and Koreans are producing BEVs with cheaper and inferior batteries from Chinese and Korean suppliers. This may be great for BEV prices, but not so much for long-term credibility in BEVs.
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  24.  @drdetroitwheels  You should know exactly how automakers will respond if they have to assemble everything in the US. More automation with less people. The jobs went overseas in the first place because American workers are one the most expensive in the world. Capital intensive jobs stayed, while labor-intensive jobs went to cheaper places. (If I heard correctly, the labor cost 6x more expensive in the US compared to Mexico.) Roughly 70% of products sold on Amazon and Walmart are made overseas, especially in places like China, Southeast Asia, Latin America, etc. They can sell at those prices because they're made overseas. Tariffs are regressive policies, meaning that less affluent working families suffer the most from increasing prices in basic goods.
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  25.  @manofsesame3024  Actually, Mitsubishi sells more cars in Asia than in North America. The sales volume in Asia is larger than Japan domestic market and North American market combined.
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  26. US cumulative inflation in the past decade is about 35%, so vehicle prices should generally trace that trend. It reflects higher labor and material costs. In reality, automakers have to periodically relocate production to different assembly plants. They need the room/time to retool and retain existing production lines for new models, especially as CARB states and US government continuously demand impossible emission targets and zero-emission vehicles. If I remember correctly, Toyota moved Tacoma assembly line from Texas to Mexico, and moved Sequoia production from Indiana to Texas. The primary reason for this relocation was because Toyota's initial plan was to assemble BEVs in their Indiana and Kentucky plants. Given the slower adoption rate of EVs in North America, reportedly Toyota will now be assembling EVs in Kentucky first. FYI, there is no money saving in moving production around from one plant to another. It's actually costly to do so, but also is a necessary process to prepare for the production of the next model. Retooling and retraining assembly lines generally takes more than 3 to 6 months at minimum. Given the high factory utilization rate, Toyota normally plans and prepares years in advance for such change. (It's also why automakers cannot easily move around production due to sudden tariffs.)
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  27. US inflation in the past 5 years is about 20%. US$36,000 in 2025 should be equivalent to US$29,000 in 2020.
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  28.  @CreateR900  You're assuming that exports to the US will continue. Automakers aren't going to bring in cars to the US going forward with 25% tax...which I recall is the same level as the chicken tax for trucks. Supply of new cars will restricted for an extended period of time. Automakers will have no choice but to pursue maximum profit margin for each vehicle given the loss in volume. It means many models will be pulled from the US market and exported to other countries.
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  29.  @faheemabbas3965  Nissan sold 3.3 million vehicles worldwide in both 2023 and 2024. At one point, Qashqai was the best selling model in some European markets. Nissan isn't going anywhere. For whatever reason, they had had incompetent management in their North American regional office unlike the European branch.
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  30. Ironic as it is Nissan has additional US capacity so they have room to relocate some production to their US assembly plants, while Toyota is operating at full capacity due to high demand and cannot adjust quickly.
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  31. Higher new car prices will most likely impact used car market (and possibly repair components if they're imported). It may also inadvertently distort car insurance and car loans...as well as consumption pattern of other products. The pandemic caused an artificial supply shortage due to the disruption in supply-chain. Universal flat tariffs will probably have similar economic impact.
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  32. If Subaru will be adopting Toyota's hybrid system, perhaps in the future Subaru's US hybrid production may also be supplied by Toyota's battery factory in North Carolina that's currently under construction. Reportedly, Toyota will start small production of batteries for hybrids, plug-in hybrids, and EVs from around 2025 for the North American market. The final completion of all battery production lines in North Carolina is scheduled for 2030.
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  33. Chinese EV market is very competitive and a completely isolated segment. Most Chinese automakers lose money selling pure BEVs because they're forced to sell BEVs in the US$5,000-20,000 price range, and they have massive over capacity. There is no way a non-Chinese automaker can sell a car in China at that price and make money unless they seriously compromise with quality. As such, it's cheaper to use all Chinese components for the Chinese domestic market. In contrast, the North American market requires reliable, durable, fuel-efficient, and safe cars due to higher consumer expectations and government regulations, and the main price range would be about US$30,000-60,000 for most vehicles. Japanese automakers generally tailor-make vehicles for each region, such as China, North America, Europe, and Japan. Even if it's the same brand/model, the size, spec, interior, and components are different depending on each region. (The Japanese domestic market is completely isolated from the rest of the world as well, since 40% of new cars sold are Kei-cars and trucks. Which is also why US cars don't sell in Japan.)
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  34. The European BEV model version was announced first in Mar 2025.
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  35. If automakers didn't have to worry about increasingly strict emission standards, they wouldn't be in this position.
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  36. Britain's ZEV quota for 2025 is 28%. Automakers have no choice but to comply and offer EVs, although consumers aren't necessarily interested.
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  37. If Trump's latest deal with the UK is a reference, 10% of tariffs on all goods stay. Vehicles up to 100,000 imports from UK will be exempt from the 25% auto-tariffs but will be subject to 10% tariffs. Toyota and Nissan have assembly plants in the UK, but we've no idea which companies get the exemption allocation. And this is in addition to the reality that US assembled vehicles need tires that require imported rubber, infotainment touch screens made in Asia, and batteries that use ingredients from all over the world. The tariff impact will hit everything from wipers, seat belts, floor mats, seat cushions, materials, (replacement) components, etc. The factory automation robotic arms needed in US assembly plants are often made by Japanese and German companies, so tariffs may hit the expansion plan as well. It's be more expensive to import, and it'll be more expensive to assemble in the US. Cost will increase either way.
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  38.  @drdetroitwheels  If more Americans move into manufacturing, that will mean less people available in housing, construction, services, etc...impacting labor costs and prices in those sectors (unless you're advocating immigration). It's really about optimization of your workforce. US already has a perfect employment level. So do you want more Americans making shoes, building houses, or making seat covers and floor mats?
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  39. You may've been spoiled by extended exposure to Lexus. I personally like the rugged look of the gas version. But again, my first car was a Subaru, so I'm biased.
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  40. The cost saving was offered in the relatively low prices of entry-level vehicles. If all cars and components were to be manufactured in the US, it will be extremely challenging to sell vehicle under US$30,000 because the US is one of the most expensive places to manufacture goods. The unit production cost of a car is mostly the cost of materials and components, while labor cost for assembly is a small contribution. Tariffs also impact the machines that are needed to make components and in assembly plants.
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  41. Japan doesn't have any noticeable tariffs on US products. That's why there is nothing to bargain, and the Japanese government isn't stupid enough to hurt the cost of living of own citizens by placing new import taxes. But the geopolitical implications of US tariffs is far worse than Americans realize.
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  42. Toyota has had a very high worldwide factory utilization rate (aside from China), meaning that they cannot easily move their production line. It usually takes years of planning, preparation, retooling, hiring and training to move a production line to another plant (even in the same country). And it's not just simple things like final assembly location. It's about the machines, components, and materials used in factories that will be subject to tariffs. Tire companies need to import rubber. Infotainment touch screens are made in Asia. Battery ingredients are almost always imported from all over the world. The cost increase will touch every product.
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  43. European unit sales of Toyota and Lexus grew 3 years in row. It was up 9% in 2023, and reached 1.17 million units. So if Toyota is selling less in Northern Europe, they must be making sales in other regions within Europe. The reality is Toyota has been struggling to cope with more demand than it can manufacture for a couple of years. The demand is so strong and inventory is so low, the waiting period for some models in US, Canada, Australia can reach months.
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  44. Japan doesn't have any tariffs on US products. In fact, most countries don't have any meaningful tariffs on US products. They don't sell because they're not good quality. But Apple products sell well, because they're good. It's simple as that.
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  45. Just google US vehicles sales by model. Apr 2024 was 13,933, and March 2024 was 15,337 units. Tundra sales are small compared to Ford trucks, but sales are up 20-30% compared to 2023.
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  46.  @RFJersey  The problem with that logic is that major US trading partners (like Canada, Mexico, Japan, UK, EU) don't have significant tariffs on US products, due to various free trade arrangements that were agreed upon over the past few decades. US products don't sell not because of tariffs, rather because they're either too expensive or unattractive. But if you have attractive products like iPhones and iPads, foreign countries will purchase them. I've heard India, Turkey, Brazil, Russia and China have high tariffs on certain products. US approach may sense for those countries, but not for most major trading partners.
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  47. Toyota is the largest automaker in terms of sales volume, yet their Operating Profit margin for North American segment is the lowest among all regions due to heavy competition. North American profit margin is usually lower single digit, while world-wide total profit margin is around 10%. There is no way in the world Toyota and other automakers can absorb a 20-30% tariff. Under the new tariff scheme some models will be losing money for Toyota, so they'll have to be pulled from the US market.
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  48. I've no idea about BEV success and marketshare. Toyota's approach has always been that let the customers decide the future, not government mandates. But I can tell you about hydrogen fuel-cell technology and its usage. In Tokyo, public buses are now switching to hydrogen fuel-cell, developed and assembled by Toyota. And Hitachi and JR East are co-developing ydrogen fuel-cell trains using Toyota's system. (The prototype is named HYBARI, and is being developed to replace diesel trains for non-electrified tracks in the future, some time in the 2030s.) I've seen a few countries in Europe also attempt using hydrogen for trains and for steel production. Hydrogen fuel cell technology is being research and developed for the era when oil and natural gas are phased out (probably sometime in this century). It's why Toyota's prototype/concept car was named MIRAI, which means "FUTURE" in Japanese. Mind you that Toyota's hybrid research started in the 1970s during the last Oil Crisis. But Toyota was only able to develop and offer the first hybrid vehicle in the 1990s with advances in rechargeable batteries and electric motors. And now around half of all new vehicles sold by Toyota (and Honda) are hybrids. Automakers have to think in decades, not years. The reality is most countries still burn fossil fuel to generate their electricity. China, US, Australia still need to coal to provide affordable electricity, while Germany and Japan are dependent on natural gas. Many countries aren't completely convinced that all vehicles can be replaced by BEVs, since it's unrealistic to switch all of the electricity grid to renewal energy, especially with growing electricity demand from AI and data centers. Commercial trucks are another area where BEVs don't always make the most economic sense.
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  49. I remember hearing the "annoying synthetic noise" was deliberately included, as Toyota quickly realized that pedestrians in Japan were not able to hear the Prius approaching them when in battery-mode. It's meant as a safety feature to protect the pedestrians.
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  50.  @logikgr  Life is stressful already. Some people don't wish to be bothered by more stress. And the charging infrastructure is entirely dependent on where you live, work, and drive. If you've ever driven in places where you only see corn/wheat fields for hours...BEVs won't be the first choice.
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