Strong Yen, U.S. Trade Tariffs bites Toyota
Toyota Motor predicted a 21 percent drop in profits for the current fiscal year amid US President Donald Trump's tariffs
Quick overview
- Toyota Motor forecasts a 21% decline in profits for the current fiscal year due to US tariffs and a strong Japanese Yen.
- The company expects operating income to drop to 3.8 trillion yen ($26 billion) for the year ending March 2026.
- Tariffs and rising material costs are contributing factors to the anticipated profit decrease.
- Toyota faces challenges in maintaining sales in China amid fierce competition from local brands.
Toyota Motor predicted a 21 percent drop in profits for the current fiscal year amid US President Donald Trump’s tariffs, a strong Japanese Yen dampens the impact of robust demand for hybrid vehicles.
The top-selling carmaker in the world anticipates operating income to reach 3.8 trillion yen ($26 billion) in the year ending March 2026, up from 4.8 trillion yen in the previous year. That was approximately consistent with the average of 4.75 trillion yen among the 25 analysts LSEG polled.
Toyota is at risk of suffering from widespread fallout from Trump’s tariffs.
Price increases may cause U.S. consumers to become less optimistic due to the potential for a decline in consumer sentiment in the United States and the effect on its exports to the United States
Toyota stated that tariffs, higher material prices, and the negative effect of a stronger yen were the reasons for the lower profit for the upcoming year.
Toyota may have to pay higher labor costs and increase its investment if it chooses to increase the size of its US production base as with other multinational automakers operating in the world’s largest economy,
Toyota had difficulty stopping a decline in sales in the largest auto market in the world due to fierce competition from Chinese brands, even though its car sales in China have decreased less than those of other Japanese automakers.
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