Toyota Motor cut its full-year operating profit forecast by 16%, citing the impact of U.S. tariffs on imported vehicles, rising material costs, and a stronger yen. The Japanese automaker now expects operating profit for the financial year ending March 2026 to total 3.2 trillion yen ($21.7 billion), down from an earlier projection of 3.8 trillion yen.
The revision reflects Toyota’s latest assessment of the financial strain from newly imposed U.S. import tariffs. The company said it now anticipates a 1.4 trillion yen ($9.50 billion) reduction in annual profit linked to the U.S. levies. It had previously estimated a smaller hit of 180 billion yen for April and May, but had not issued a full-year forecast until now.
“Toyota said it expects the U.S. levies to reduce its profit by 1.4 trillion yen ($9.50 billion) for the entire year,” the company said in a statement. The impact comes as Japanese automakers navigate a shifting trade environment, despite a recent bilateral agreement between Tokyo and Washington that aims to ease tariffs on auto exports. Under the deal, the current total duties of 27.5% on Japanese cars are slated to drop to 15%, though no implementation timeline has been confirmed.
For the April to June quarter, Toyota reported operating profit of 1.17 trillion yen, down from 1.31 trillion yen a year earlier. The result, however, surpassed the 902 billion yen average forecast from seven analysts surveyed by LSEG. The quarterly performance underscores Toyota’s resilience, supported by robust global demand, even as trade tensions and currency fluctuations challenge earnings.
Last week, Toyota announced record global production and sales for the first half of the year, driven by solid demand in key markets including North America, Japan, and China. The company continues to monitor developments related to tariff changes, while adjusting its financial outlook in light of ongoing cost pressures.