Toyota Motor raised its full-year operating profit forecast, betting that strong performance in markets outside the United States will help offset the financial strain from new U.S. import tariffs imposed by President Donald Trump.
The world’s top-selling automaker now expects an operating profit of 3.4 trillion yen ($22.6 billion) for the fiscal year ending March, up 6% from its earlier projection of 3.2 trillion yen. Toyota estimated that the tariffs would cost it 1.45 trillion yen this year.
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“North America is facing a very tough situation due to the impact of tariffs,” said Chief Financial Officer Kenta Kon during a results briefing. While conditions “were not easy” in other regions such as China, Europe, Asia, and Africa, both profitability and sales volumes remained “solid,” he added.
For the July–September quarter, Toyota’s operating profit fell 27% to 839.6 billion yen, missing analysts’ forecasts of 863.1 billion yen, marking a second straight quarterly decline. The company cited a weaker yen, higher sales volumes, and cost-cutting efforts as reasons for its improved annual outlook.
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Toyota’s North American division posted a 134 billion yen loss for the first half of the year, reflecting the strain from tariffs despite strong regional demand. Deputy CFO Takanori Azuma noted that growing markets such as India are playing an increasingly vital role in supporting profitability.
“A decade ago, Toyota’s profit structure was heavily dependent on North America. If tariffs had become an issue under those circumstances, the impact would have been much greater,” Azuma said.
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Global production for Toyota and Lexus brands rose 6% to nearly 5 million vehicles in the first half of the fiscal year, driven by double-digit growth in U.S. sales and output.