Toyota Motor expects its operating profit to fall by 20% in the current fiscal year due to the impact of a weaker U.S. dollar and uncertainty surrounding President Donald Trump’s tariffs, the company said on Thursday.
The world’s largest automaker projected operating income of 3.8 trillion yen ($26 billion) for the year ending March 2026, down from 4.8 trillion yen in the previous fiscal year. Currency fluctuations are expected to reduce profits by 745 billion yen, while tariffs could cost the company 180 billion yen in just April and May.
At a press conference, CEO Koji Sato acknowledged the lack of clarity around the tariffs, saying Toyota remains uncertain about their permanence or future impact. The company’s results highlight the broad risks global trade tensions pose to major manufacturers.
Operating profit for the January–March quarter edged up just 0.3% to 1.12 trillion yen. North America, Toyota’s largest market, posted an operating loss of 100 billion yen—up from 28 billion yen a year earlier—due to a temporary shutdown at the Indiana plant.
CLSA analyst Christopher Richter noted that while U.S. demand remains strong, the situation may worsen if tariffs persist. “If you need to raise prices, can you still grow sales?” he asked.
Toyota’s sales in China continue to decline, though the drop is less steep than that faced by other Japanese carmakers. Japan remained the company’s most profitable region, with an 18% rise in fourth-quarter profit.
Toyota’s stock ended the day down 1.3% following the earnings release.
