Toyota Forecasts 34.9% Net Profit Drop for Fiscal 2025, Cites $1.3 Billion Hit from 25% U.S. Tariffs

Toyota Motor Corp. has forecasted a significant decline in its financial performance for the fiscal year ending March 2026, projecting a 34.9% drop in net profit to 3.1 trillion yen ($21.6 billion). This downturn is attributed to higher U.S. tariffs, which are expected to reduce Toyota's operating profit by $1.3 billion in April and May alone, and a stronger yen, which are expected to impact the company's profitability. The company anticipates an operating profit of 3.8 trillion yen, a decrease of 20.8% from the previous fiscal year, despite expecting record sales of 48.5 trillion yen, up by 1%. The impact of the 25% U.S. tariffs in April and May is estimated to reduce Toyota's operating profit by 180 billion yen. Toyota's CEO, Koji Sato, highlighted the difficulty in forecasting future impacts due to the fluid nature of the tariffs. The company reported a 21% profit decline and a North America loss in the last quarter. Toyota is adjusting its shipment strategies in the short term and plans to develop products locally to suit local customers in the medium to long term. The appreciation of the yen against the U.S. dollar is also expected to cut Toyota's operating profit by 745 billion yen for the fiscal year.