NextFin news, Toyota Motor Corporation, the world's largest carmaker headquartered in Tokyo, forecasted on Friday, September 12, 2025, a 21% decline in operating profit for the fiscal year ending March 2026. The company attributed this expected profit drop primarily to tariffs imposed by the United States government under former President Donald Trump's administration, along with adverse currency exchange rates and increased material costs.
The company projects operating profit to fall to approximately 3.8 trillion yen (about $26 billion), down from 4.8 trillion yen in the previous fiscal year. Net profit is also expected to decrease by nearly 30% to 3.1 trillion yen (around $21.5 billion).
Toyota President and CEO Koji Sato stated that the US tariffs remain a significant challenge, with ongoing uncertainty as the US government continues to adjust tariff policies. He noted, "Since the government and its agencies are still working on the details, US customs tariffs may change. It is very difficult to predict further developments. On the other hand, we have already factored in the impact of those measures that have already been implemented in our forecasts for this fiscal year."
Additional financial pressures include the strengthening of the Japanese yen against the US dollar, which is expected to negatively impact Toyota's earnings by approximately 745 billion yen (about $5.1 billion), and rising raw material prices, which could cause further losses of around 350 billion yen (over $2.4 billion).
Despite these challenges, Toyota's sales in the United States remain stable. Chief Financial Officer Yoichi Miyazaki reported plans to sell 2.94 million vehicles in North America during the current fiscal year, representing an 8.8% increase compared to the previous year. Miyazaki emphasized that Toyota does not intend to raise vehicle prices in the short term as a response to tariffs.
Furthermore, President Sato mentioned the possibility of redirecting some vehicles originally intended for the US market to other regions to manage supply chain adjustments. He said, "It would be ideal to supply products to the US, where we have many customers, but in the short term, we should also consider the possibility of adjusting supply directions."
The announcement was made in Tokyo and reported by multiple sources including MSN and TopGir, reflecting Toyota's cautious outlook amid ongoing trade tensions and economic uncertainties affecting the global automotive industry.
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