Michelle ThompsonToyota Motor projected a 21% drop in profits for the current fiscal year, citing the pressures from US President Donald Trump’s tariffs and a rising yen, which have dampened the impact of strong hybrid vehicle demand.
The company, the world’s leading automaker, forecasts operating income to reach 3.8 trillion yen ($26 billion) for the year ending March 2026, a decline from 4.8 trillion yen in the previous financial year. This aligns closely with the 4.75 trillion yen average forecast from 25 analysts surveyed by LSEG.
Toyota is facing risks from the broader effects of Trump’s tariffs, which could affect not just US-bound exports but also consumer sentiment in the US and globally, as price increases may lead to reduced consumer confidence.
The expected profit decline for the coming year is attributed to the stronger yen, rising material costs, and the impact of tariffs, as stated in a company presentation.
Like other automakers operating in the US, Toyota may encounter high labor costs and increased investment needs if it chooses to expand its US production capacity.
While Toyota’s vehicle sales in China have declined less than those of other Japanese automakers, it continues to struggle with falling sales in the world’s largest car market, facing intense competition from Chinese brands.
