Retail News CRM

Author: Mei Ling Tan

  • Indian Sneaker Brand Zaydn Raises Fresh Capital for Expansion

    Indian Sneaker Brand Zaydn Raises Fresh Capital for Expansion

    Indian sneaker brand Zaydn has secured fresh capital to accelerate retail expansion across the domestic market.

    The investment will support the brand’s production scale and broader distribution network as consumer appetite for homegrown footwear labels increases across Indian urban centres.

    Targeting domestic sneaker demand

    Capital from the round will go directly toward expanding retail channels and widening the brand’s core product lineup. Indian consumers continue to shift casual wardrobe budgets toward sneakers and athletic styling, opening room for domestic players to compete alongside established global labels.

    Distribution strategy for direct-to-consumer and lifestyle footwear in India relies heavily on blended retail channels. Brands must balance online marketplaces with dedicated brand outlets to build repeat purchase rates and maintain stock efficiency in metro regions.

    The race for shelf space

    Homegrown footwear brands in India face stiff competition from multinational sporting goods giants and local value manufacturers alike. Established international brands hold the bulk of premium mall space, leaving younger labels to build loyalty through direct channels and targeted offline footprint before pushing into Tier-2 retail corridors.

    RetailNews Asia will track Zaydn’s subsequent channel rollout and store openings as the new capital deployment begins across regional markets.

  • Slippage On Instant Swaps: Why ChangeNOW Rates Never Matched The Quote

    Slippage On Instant Swaps: Why ChangeNOW Rates Never Matched The Quote

    An instant swap shows you a number before you send anything: this much in, that much out. The number is the whole sales pitch, because it is the only thing a user can compare across services. In our transactions, the number that arrived was consistently smaller than the number on the screen.

    The Legitimate Reasons

    Some of that gap is structural and honest. A non-custodial swap is not a single trade. Your coin has to confirm on one chain, be routed to a liquidity venue, executed there, then sent out on another chain. Between the quote and the execution sit block times, network fees at both ends, and whatever the order book did in the meantime. On a volatile pair, minutes of confirmation time can move the price by a full percentage point on their own.

    Services handle this in one of two ways. A fixed rate locks the number and charges a premium for the risk the operator takes. A floating rate passes the market movement to you and is cheaper when nothing happens. Both are defensible if the difference is explained at the point of choosing.

    What We Observed

    In our transactions the delivered amount fell short of the displayed estimate every time, including on swaps that confirmed quickly and on pairs that barely moved in the window. The shortfalls were not catastrophic individually. Across a run of transactions they became the largest cost of using the service, well above the headline fee.

    Two things made the shortfall hard to audit. The deducted network fee was not itemised against the on-chain fee actually paid, and the reference rate used at execution was not disclosed, so there was nothing to check the outcome against. When you cannot reconstruct a price, you cannot tell a market move from a spread.

    The Question We Asked

    We asked ChangeNOW to explain, for specific transaction hashes we supplied, the reference rate used at execution, the venue where the trade was filled, and the breakdown between network fee and service spread. That is a question any regulated venue answers as a matter of routine. We will publish the reply.

    How To Protect Yourself

    Price the whole route, not the headline. Before committing, note the quote, then check the same pair on a liquid exchange and on a second swap service. Do the arithmetic afterwards on what actually landed, not on what was promised.

    Prefer a fixed-rate option for anything that matters, and read what the service does if the rate lapses: refunding to your original address is very different from executing at whatever the market has become. Test any new pair with a small amount first. And treat a service that will not itemise its fees as more expensive than one that does, whatever the screen says.

    This article describes the first-hand experience of the Retail News Asia team and publicly posted user complaints. It does not assert that ChangeNOW has broken any law. ChangeNOW was invited to respond before publication and any reply will be added in full.

  • FamilyMart Rolls Out T-Shirt Uniforms and Relaxes Hair Color Rules in Japan

    FamilyMart Rolls Out T-Shirt Uniforms and Relaxes Hair Color Rules in Japan

    FamilyMart introduced casual T-shirt uniforms and relaxed hair color restrictions for store clerks across Japan to widen its recruitment pool. The convenience store operator replaced its traditional buttoned jackets with casual wear to make daily shifts more practical during hot summer months.

    Store employees can now dye their hair freely, removing a long-standing guideline that required natural or strictly regulated dark tones. The policy applies to both full-time store staff and part-time workers across the chain’s franchised and company-owned network.

    New dress code for store staff

    The new uniform lineup features lightweight, breathable T-shirts designed for high-turnover shift work and stock handling. Staff can wear the shirts as their standard work attire rather than layering heavy branded vests or stiff aprons over personal clothing.

    Easing appearance rules directly targets younger job seekers and student workers who frequently cited grooming mandates as a barrier to working in convenience retail. Store managers also gain flexibility to recruit older part-timers and foreign workers who prefer less formal uniform requirements.

    Labor pressures in Japanese retail

    Convenience operators across Japan are adapting store operations to manage an acute shortage of frontline labor. Rival chains Lawson and Seven-Eleven Japan have rolled out self-checkout kiosks, automated ordering systems, and revised shift schedules over the past two years to keep stores staffed around the clock.

    Relaxing dress standards represents an inexpensive retention and hiring tactic compared to sharp wage increases. Japanese retailers historically enforced strict uniform and grooming standards to present an orderly, uniform brand image to local shoppers.

    FamilyMart franchisees will complete the uniform transition across regional store clusters as autumn inventory distribution schedules take effect.

  • Louis Vuitton Exits Chinese Province After Sales Drop and Trademark Dispute

    Louis Vuitton Exits Chinese Province After Sales Drop and Trademark Dispute

    Louis Vuitton closed its retail footprint in a Chinese province after local store sales dropped and a trademark dispute sparked consumer backlash against the French luxury house.

    The pullout follows intense public scrutiny in China over the brand’s legal enforcement of its intellectual property, which prompted pushback from shoppers and weakened foot traffic across regional department stores.

    Reassessing Regional Footprints

    Luxury groups in mainland China are reviewing their exposure to lower-tier provincial markets where operating costs outpace store revenue. Falling retail demand across secondary cities has pushed European fashion houses to trim underperforming storefronts and redirect capital toward flagship flagships in tier-one hubs.

    Shopper sentiment in the affected province turned sharply against the brand during the legal dispute. Local consumers shifted spending away from the label, accelerating management’s decision to shut down operations in the territory entirely.

    Consolidation in Core Hubs

    European luxury labels previously expanded across provincial capitals to capture rising domestic wealth outside Beijing and Shanghai. That expansion model now faces pressure as consumer spending concentrates in top-tier commercial centres and duty-free zones such as Hainan.

    LVMH continues to review its retail network across Greater China, with future store renewal deadlines and regional lease expiries determining where the group will prune or retain square footage.

  • Hyundai Commits to Extended-Range Electric Vehicles

    Hyundai Commits to Extended-Range Electric Vehicles

    Hyundai Motor Group is developing extended-range electric vehicles to broaden its electrified lineup across major automotive markets. The powertrain format pairs electric motors with a small petrol engine acting solely as an onboard generator to charge the battery pack while driving.

    The technology eliminates direct mechanical drive from the combustion engine to the wheels, delivering pure electric driving dynamics without public charging dependency on long journeys.

    How the Powertrain Operates

    Extended-range electric vehicles rely on an electric motor to turn the axles at all times. When battery capacity runs low, an internal combustion engine kicks in to supply electricity directly to the battery and motor. Drivers refuel at conventional petrol stations while retaining the smooth acceleration and regenerative braking of a dedicated battery electric vehicle.

    Automakers increasingly view the technology as a practical interim solution for buyers concerned about charging station availability, high battery replacement costs, and cold-weather range degradation.

    Market Competition and Powertrain Shifts

    Chinese manufacturers such as Li Auto and Seres built substantial domestic market share using extended-range architectures over the past three years. Hyundai’s push into the format brings direct competition from an established legacy carmaker to a powertrain segment previously dominated by Chinese electric vehicle specialists.

    The strategy lets the Seoul-based manufacturer scale electrified production while managing capital allocation across pure battery development, conventional hybrids, and software-defined vehicle architectures.

    Hyundai plans to roll out its initial extended-range models across target regional markets as production schedules and regional regulatory frameworks align.

  • Southeast Asian Shopping App Installs Jump as Singapore and Indonesia Lead Gains

    Southeast Asian Shopping App Installs Jump as Singapore and Indonesia Lead Gains

    Shopping app downloads across Southeast Asia surged in the first half of 2026, led by a 67 per cent jump in Singapore.

    Average session duration in Singapore expanded 58 per cent over the same period as regional platforms stepped up user acquisition spending.

    Data from mobile analytics firm Adjust shows Vietnam recorded a 42 per cent rise in e-commerce application installs alongside a 21 per cent gain in session length. Indonesia registered a 36 per cent increase in installs and a 62 per cent jump in session time. Malaysia saw downloads rise 14 per cent and sessions increase 38 per cent, while Indian app installs climbed 37 per cent against a 42 per cent increase in sessions.

    Platform Spending and Acquisition Battles

    Shopee, Lazada and TikTok Shop are competing directly for user traffic across the region, channeling higher advertising budgets into external media channels including YouTube. Shopee has maintained quarterly revenue expansion of nearly 50 per cent, but escalating logistics requirements and higher sales expenses continue to weigh on operating budgets.

    Fulfillment across fragmented island networks and developing road corridors keeps shipping expensive across Southeast Asia. Those operational complexities earlier prompted Amazon to halt regional expansion plans beyond Singapore.

    Usage Gaps Behind Western Markets

    Actual time spent inside shopping apps across Asia remains lower than the global average despite the sharp uptick in downloads. North American shopping apps logged a 46 per cent increase in installs and a 26 per cent rise in session length over the same timeframe, holding higher total engagement per user.

    RetailNews Asia tracking shows marketplace operators are now focused on closing that engagement deficit as consumer acquisition costs rise heading into the final quarters of 2026.

  • Sea Limited Posts $14.9 Billion First-Half Revenue as Logistics Spending Expands

    Sea Limited Posts $14.9 Billion First-Half Revenue as Logistics Spending Expands

    Singapore-based Sea Limited generated $14.9 billion in revenue during the first half of 2026, up 47 percent from a year earlier as Shopee expanded regional fulfillment networks.

    Net income rose 9 percent to $896 million over the six-month period, slowed by higher credit loss provisions at financial services arm Monee and heavy capital spending on domestic shipping capacity.

    Logistics and Fintech Reshape Core Operations

    Shopee solidified its lead across Southeast Asian markets by pouring capital into dedicated logistics networks, countering delivery bottlenecks that earlier pressured merchant margins. The group also preserved its overseas footprint in Brazil after retreating from short-lived retail expansions across other overseas territories.

    Financial unit Monee expanded consumer credit to bring unbanked shoppers onto Shopee’s marketplace. Higher lending volumes brought higher delinquency reserves, tracking the rising credit costs across Southeast Asian digital banking books.

    Earnings Split and Margin Pressures

    Gaming division Garena, developer of mobile title Free Fire, provided cash flow but continued to operate with few operational ties to the group’s retail and payment wings. Sea holds a market capitalization of $68 billion, trading at 44 times earnings with a gross margin of 44.34 percent.

    By comparison, Latin American peer MercadoLibre posted $19 billion in first-half revenue, though its net income slid 13 percent to $883 million under identical pressures from bad debt provisions and retail competition. Both operators demonstrate that defending marketplace supremacy in developing economies requires running integrated logistics and consumer credit arms directly on the corporate balance sheet.

    Investors are monitoring whether provisions inside the Monee lending portfolio stabilize ahead of the third-quarter financial filing.

  • China Shifts Property Market to Completed Homes in Broad Policy Overhaul

    China Shifts Property Market to Completed Homes in Broad Policy Overhaul

    China ordered local governments on Friday to prioritise sales of completed homes over presales, overhauling the housing model to halt a property downturn that has dragged on domestic consumer spending.

    The joint directive from the housing ministry, the natural resources ministry and the National Financial Regulatory Administration targets newly transferred residential land alongside parcels sold without construction planning permits.

    Rules on land and developer financing

    Projects on newly transferred plots must adopt the finished-home sales structure, while sites with existing permits are encouraged to make the transition. Two accompanying notices from financial regulators cleared commercial banks to issue revised development loans and gave securities authorities room to back mergers and restructurings among listed property firms.

    The policy overhaul directly attacks the off-plan financing structure that left millions of buyers waiting for unfinished apartments and froze household balance sheets across mainland cities. “The policies announced today are stronger than what the market expected,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management, noting that weak domestic demand stemmed largely from real estate distress.

    Impact on consumer confidence and household wealth

    Property accounts for the bulk of Chinese household wealth, making housing stability essential for any rebound in retail sales, automotive purchases and consumer services across second-tier and third-tier markets. For consumer brands operating in China, weak property valuations have consistently translated into cautious discretionary spending and higher promotional discounting over the past two years.

    Municipal governments must now issue local execution timetables for the finished-home rules, with developers waiting for commercial banks to publish specific loan quotas under the updated development guidelines.

  • Australian Retail Profit Lags Sales as Hidden Operating Costs Bite Margins

    Australian Retail Profit Lags Sales as Hidden Operating Costs Bite Margins

    Australian retail sales rose 2.8 per cent in the 2024-25 financial year, but operating profit before tax grew just 1.5 per cent to $38.8 billion as margin pressure intensified.

    Data from KPMG’s Retail Health Index shows that gap widening further into 2026, forcing boards to rethink conventional cost cutting.

    Retailers confronting squeezed margins often reduce store staff hours and trim marketing budgets. Advisory firm Olvera Advisors found these immediate cuts routinely fail to stop profitability leaks, which sit deeper in inventory management, returns handling and supplier contracts.

    Holding Costs and Inventory Drag

    Aged stock sitting in warehouses past 90 days creates an unmeasured drag on working capital. Benchmarking from APQC puts median inventory carrying costs at 10 per cent of value each year. A business holding $5 million in aged stock absorbs $500,000 annually in holding expenses before accounting for final clearance markdowns.

    Supplier renegotiations also remain narrowly focused on unit pricing rather than structural terms. Data from the Payment Times Reporting Regulator shows average retail payment terms at 31 days, though the 95th percentile extends to 77 days. Rebate structures frequently remain poorly tracked at the executive level, echoing findings from the Australian Competition and Consumer Commission’s supermarket inquiry.

    The Multi-Channel Fulfilment Trap

    E-commerce fulfilment and customer returns represent another growing source of unallocated operational losses. Total costs for a single product return average roughly $47 on an $80 basket, factoring in $20.78 for two-way freight, $10 in handling and an average $16 markdown. For a merchant processing one million orders annually, each single percentage point in return rate drains approximately $470,000.

    Similar accounting oversights previously hit Australia’s largest conglomerates. Woolworths paid $217.4 million for an 80 per cent stake in marketplace MyDeal in 2022 before shutting it in 2025 at a cash cost between $90 million and $100 million, alongside a $45 million impairment charge. Rival Wesfarmers similarly wound down its Catch marketplace after channel-level operating costs outpaced unit economics.

    Retail operators now face pressure from commercial lenders to present granular reporting on stock ageing past 90 days, net channel profitability and full-year return costs ahead of the next seasonal markdown cycle.

  • Miniso First-Half Revenue Rises 22% to $1.7 Billion on China and US Gains

    Miniso First-Half Revenue Rises 22% to $1.7 Billion on China and US Gains

    Miniso lifted its first-half revenue 22.4 per cent to RMB11.5 billion (US$1.69 billion) as Chinese domestic demand rebounded and foreign store openings accelerated. Second-quarter revenue rose 17 per cent to RMB5.81 billion (US$856.4 million) in the three months to June 30.

    Domestic sales supplied the momentum. Mainland China revenue climbed 26.2 per cent during the six months, marking the company’s fastest first-half expansion rate in three years. North American operations posted a 37 per cent top-line increase over the same period, while the Top Toy pop-culture unit grew revenue 32.7 per cent.

    Global Store Count Nears 8,700

    Network growth continued across offshore territories. Miniso finished June with 8,674 stores worldwide, adding 769 doors in 12 months. International locations accounted for almost half of all net-new store openings during the year.

    New market entries pushed the retailer’s footprint to 113 countries and territories after opening its first store in Switzerland. Top Toy also moved past mainland borders, adding storefronts in Taiwan and the US. Domestic registered members reached 130 million, up 31 per cent year on year, while US loyalty members doubled to roughly 5.8 million.

    IP Formats and Capital Allocation

    Value retailers across East Asia face margin pressure from discount e-commerce platforms, pushing operators to rely on licensed intellectual property and larger destination shops to protect transaction values. Miniso has shifted toward branded character goods and blind-box toys to lift average basket spend rather than relying solely on cheap household consumables.

    Founder and chief executive Guofu Ye said the group will keep directing capital toward proprietary IP lines and large-format retail sites while pursuing regional localisation.

    Capital management plans remain active following the June rollout of a HK$2 billion (US$255 million) share buyback program, which runs alongside Ye’s personal commitment to increase his equity stake in the business.

  • Bangladesh Imports from India Hit $10.96 Billion Despite Port Limits

    Bangladesh Imports from India Hit $10.96 Billion Despite Port Limits

    Bangladesh increased its imports from India to $10.96 billion in fiscal 2025-26, defying land border curbs designed to restrict cross-border shipments between the two neighbours.

    The annual import bill rose 13.9 percent from $9.62 billion recorded in the previous fiscal year, according to National Board of Revenue data. Bangladeshi exports to India dipped slightly over the same period, slipping to $1.75 billion from $1.76 billion. The figures leave Dhaka with a bilateral trade deficit exceeding $9.2 billion, with India supplying more than six times what it buys in return.

    Shifting cargo from land to sea

    Bilateral trade friction escalated following political changes in Bangladesh in 2024. Dhaka restricted yarn imports across land borders in March 2025 to shield domestic spinning mills, redirecting all Indian yarn shipments exclusively through Chattogram seaport. New Delhi responded in April 2025 by halting airport transhipment facilities for Bangladeshi garments bound for third countries, later adding land port curbs on Bangladeshi processed food, jute, furniture, and apparel.

    The administrative barriers failed to dent demand for Indian textile inputs. Bangladesh Textile Mills Association president Showkat Aziz Russell said recorded yarn imports from India doubled to approximately 300 billion taka in fiscal 2026, up from 140 billion taka a year earlier. Channeling shipments entirely through seaports brought previously informal or unrecorded overland cargo onto customs registries, inflating formal totals while keeping factory order books supplied.

    Structural imbalance in regional apparel

    Textile mills and garment factories across Dhaka and Chattogram rely heavily on Indian cotton, yarn, and fabric because of shorter freight times and buyer-nominated fabric specifications. While India is Bangladesh’s second-largest overall trading partner after China, Dhaka’s outbound shipments remain heavily concentrated in ready-made garments, which face domestic competition and strict standard compliance inside India.

    Policy analysts and industry bodies note that despite duty-free access granted under the South Asian Free Trade Area framework in 2010, the two countries have yet to build integrated supply chain agreements. Bangladesh Garment Manufacturers and Exporters Association president Mahmud Hasan Khan and Knitwear Manufacturers president Mohammad Hatem have urged both governments to resolve transport frictions through high-level talks.

    Trade associations from both nations continue to push for formal negotiations on a Comprehensive Economic Partnership Agreement to clear land port bottlenecks and establish mutual certification standards.

  • Australia Food Manufacturing Turnover Hits $182.6 Billion

    Australia Food Manufacturing Turnover Hits $182.6 Billion

    Australia’s food and grocery manufacturing turnover rose 5.5 per cent to $182.6 billion in the 2024-25 financial year. Steady consumer demand across supermarket aisles drove the increase.

    Total workforce numbers across processing plants and distribution hubs passed 301,000 people over the 12-month period. That headcount now represents 33 per cent of all manufacturing jobs in the country.

    Squeezed margins and factory payrolls

    The annual State of the Industry 2024-25 report from the Australian Food and Grocery Council shows steady top-line expansion across packaged goods, beverages and daily essentials. Yet the headline revenue growth conceals worsening operational headwinds inside processing facilities.

    Persistent cost pressures and compressed margins are reducing the capital available for factory upgrades, automation and long-term expansion, the council warned. While consumer spending on staples supported turnover, wholesale input prices and elevated running expenses continue to erode net profitability across supply chains.

    Regional production pressures

    Similar margin pressure affects food manufacturing hubs across the Asia-Pacific region. Processors face higher utility bills, freight volatility and stubborn ingredient costs. When consumer-facing brands cannot fully pass wholesale cost increases to supermarket buyers, capital spending plans are routinely deferred.

    Factory operators are now recalibrating capital expenditure budgets for the 2025-26 cycle. They continue to monitor wholesale input pricing ahead of supplier negotiations with national retail chains.

  • Uniqlo Plans 20 Urban Flagship Stores Across Japan over Next Decade

    Uniqlo Plans 20 Urban Flagship Stores Across Japan over Next Decade

    Fast Retailing plans to expand Uniqlo’s flagship store network in Japan to around 20 locations over the next decade. The apparel group is shifting capital away from standardised suburban shopping centres to focus on multi-storey urban showpieces in prime metropolitan districts.

    The strategy alters the retail footprint that built Uniqlo into Japan’s dominant clothing chain. For decades, the brand expanded by opening uniform formats along roadside corridors and inside suburban shopping complexes across provincial prefectures. Future capital expenditure will prioritise high-traffic urban centres designed to deliver higher sales density and elevated brand visibility.

    Shifting capital from roadside formats

    Standard suburban outlets offer limited scope to show the brand’s full product range or create distinctive customer experiences. Flagship formats allow the group to display complete seasonal collections, test specialty service concepts, and handle heavier transaction volumes per square metre.

    Across Asian retail markets, apparel groups face maturing domestic suburban populations and rising store operating overheads. Flagship locations in transit hubs capture both regular daily commuters and high-spending international tourists, delivering better returns on lease costs than distributed suburban networks.

    New locations and tourist hubs

    Uniqlo currently runs global flagship stores in Tokyo’s Ginza district and Osaka’s Umeda commercial hub. Future openings under the revised 10-year plan will target prime retail corridors in Nagoya and Sapporo, along with additional high-footfall central Tokyo districts such as Shibuya.

    The urban rollout begins in western Japan, with Uniqlo scheduled to open its first global flagship store in Kyoto in November.

  • Chagee Second Quarter Profit Jumps to $68.5 Million as Overseas Sales Surge

    Chagee Second Quarter Profit Jumps to $68.5 Million as Overseas Sales Surge

    Chagee posted a net income of RMB464.8 million ($68.5 million) for the second quarter, up from RMB77.2 million a year earlier as international expansion lifted returns.

    Net margin climbed to 13.6 per cent from 2.3 per cent in the prior-year period. Total revenue rose 2.5 per cent to RMB3.4 billion ($503.3 million) for the three months ended June 30, supported by an 8.5 per cent increase in store count to 7,639 locations worldwide.

    Overseas Momentum Offsets Domestic Softness

    Operating income surged 387.6 per cent to RMB524.7 million after the chain cut operating expenses by 10 per cent. While gross merchandise value dropped 9 per cent in Greater China, sales across eight international markets jumped 114.3 per cent.

    Seoul provided an early spark for that overseas push. Three teahouses in the South Korean capital sold over 16,000 drinks during their first three days, driven by more than 46,000 mobile app downloads recorded ahead of the launch.

    The divergence between domestic and overseas performance reflects the intense discounting battle among premium tea brands inside mainland China. Rivals such as Nayuki and Heytea have faced margin erosion at home, prompting operators to look abroad where pricing power remains intact and consumer demand for Chinese milk tea formats is expanding rapidly.

    Member Retention and Sales Outlook

    Loyalty membership reached 257 million registered users by the end of June. Repurchase rates among active loyalty users held above 43 per cent during the period.

    Management reported that same-store sales declines moderated in July, with comps projected to swing into positive territory in August.

  • Toyota and Honda Face Factory Closures Under Proposed 50 per Cent US Tariff

    Toyota and Honda Face Factory Closures Under Proposed 50 per Cent US Tariff

    Toyota and Honda face potential plant closures in Canada after US President Donald Trump proposed doubling import tariffs on Canadian-built vehicles to 50 per cent.

    The two Japanese manufacturers assemble more than three-quarters of all light vehicles produced in Canada, making them the most exposed automakers to the cross-border levy.

    Canadian shipments represent 24 per cent of Honda’s US sales volume and 17 per cent of Toyota’s deliveries, according to Barclays data. Key export models include the Toyota RAV4 and the Honda CR-V, two of the top-selling sport utility vehicles in the American market. If implemented on Jan 1, 2027, the duties would force both companies to alter production networks that took decades to build.

    Rebuilding the North American Footprint

    Existing US tariffs cost Toyota approximately 1.4 trillion yen in the 2025 financial year. In response, the group committed up to $10 billion over five years to expand its manufacturing footprint inside the US, including a $3.6 billion assembly facility in Texas that will take over production of the Tacoma pickup truck from Mexico.

    Honda faces a steeper hurdle because its automotive unit is still working through a turnaround plan. The company has put plans for an eighth North American assembly facility on hold while talks over the US-Mexico-Canada Agreement remain unresolved. South Korea’s Hyundai reported similar delays to its regional capital spending in 2025.

    Squeezed Between US Tariffs and Chinese EVs

    The border friction hits Japanese manufacturers at a weak point in their global operations. Chinese electric vehicle makers led by BYD have eroded market share for Japanese brands across Southeast Asia, Australia and Latin America, leaving North America as the primary profit engine for both Toyota and Honda. With Chinese brands barred from the US market, defending North American market share is essential for Tokyo’s automotive sector.

    Redirecting Canadian output to alternative export destinations presents structural problems. Assembly lines in Ontario build vehicles configured specifically for US safety and emissions rules, while alternative factories across the Pacific already run close to maximum capacity.

    Negotiations over the USMCA framework continue ahead of the planned Jan 1, 2027 tariff implementation date, with Japanese parts suppliers holding off on capital allocation until trade terms are finalized.