Subaru reported a 5.3% increase in revenues for the first half of its fiscal year ending March 2026 to 2,385.7 billion yen ($15.5 billion), up year-on-year by 119.5 billion yen from higher unit sales and an improved vehicle mix and more favorable pricing.
However, operating profit was down 119.3 billion yen YoY to 102.7 billion yen, owing to the impacts of U.S. import tariffs and the appreciation of the yen, CFO Shinsuke Toda told an investors call on Nov. 10.
Significant changes in the business environment had a negative YoY impact on profit of 193.2 billion yen, somewhat offset by improved sales and cost reduction measures, according to the company’s first half consolidated financial results.
“Although there was some impact from the stronger yen and the deterioration in material cost, etc., the decrease of 154.4 billion yen caused by the additional 25% in tariffs imposed in the U.S. on autos and auto parts was a major factor,” Toda told investors.
He also noted that, while auto tariffs were reduced to 15% on Sept. 16, because of the differences in the timing of inventory replenishment, the impact of the reduction will not be reflected until the third quarter.
As for the forecast for FYE 2026, none of the full year forecasts have changed since the previous announcement and the company expects to achieve an operating profit of 200 billion yen.
However, Toda warned that if tariff pressures not only include auto tariffs but also those on steel, aluminum, and other products, the potential impact could widen.
Overall, global vehicle production decreased by 22,000 units YoY to 453,000 units. Production in the U.S. fell by 2,000 units YoY, while domestic production decreased by 21,000 units for the same period owing to the impact of construction work at the Yajima Plant. This began in August in preparation for in-house production of BEVs, resulting in the temporary shutdown of one production line.
Toda said demand in the U.S. market has been “volatile” and the company worked to control sales incentives keeping them flat YoY at $1,900 a unit.
Meanwhile, Subaru president and CEO, Atsushi Osaki, said the company’s focus on BEV production is in line with its drive towards a carbon neutral society.
“Although BEV demand has recently plateaued, our view remains unchanged that BEVs will continue to be central in the medium to long term,” he said in a company statement.
