Toyota Suffers $1.3 Billion Profit Hit in Two Months on Tariffs
[Stay on top of transportation news: .]
Toyota Motor Corp. said President Donald Trump’s tariffs will result in a 180 billion-yen ($1.3 billion) hit to operating income in just two months, with the Japanese carmaker joining a growing list of companies grappling with the fallout of trade turmoil.
The company said Masy 8 that the impact for April and May has been tentatively factored in, and the situation remains uncertain. That’s set to weigh on its full-year results, with its outlook for operating income of 3.8 trillion yen for the year ending in March 2026 falling far short of analyst expectations for 4.7 trillion yen.
The carmaker said its latest annual operating profit was 4.8 trillion yen, well below the record 5.35 trillion yen for the 2024 fiscal year — a record for any Japanese company. The manufacturer ended the fiscal year with profit rising 0.3% in the fourth quarter to 1.1 trillion yen.
“When it comes to tariffs, the details are still incredibly fluid, so it’s difficult to take steps or measure the impact,” CEO Koji Sato said at a briefing following the results. Toyota will consider building out local product development and manufacturing in the U.S. in the medium to long term, he said.
ٴ
Toyota stock is down about 15% this year.
Toyota joins some of the world’s best-known companies in sounding the alarm about the likely costs of Trump’s tariffs. The auto industry is set to be hit particularly hard, with ever-changing trade policies sparking chaos across the complex web of firms that make up the global supply chain.
Some automakers like Stellantis NV and Mercedes-Benz Group AG have pulled their earnings forecasts entirely, while others have warned of substantial blows to their bottom lines. General Motors Co. slashed its profit outlook due to as much as $5 billion of exposure to auto tariffs, while Ford Motor Co. suspended its full-year financial guidance amid expectations of a $1.5 billion hit to results.
Separately on May 8, Mitsubishi Motors Corp. said it could suffer a 40 billion-yen hit from tariffs. That’s reflected in its forecast for 100 billion yen in full-year operating income, which fell short of analyst expectations.
Last week, Trump offered some relief to the industry by signing a directive that would exempt imported automobiles from separate tariffs on aluminum and steel. That came alongside a separate proclamation that allows carmakers that produce and sell completed automobiles in the U.S. to claim an offset worth up to 3.75% of the value of American-made vehicles — a temporary reprieve from the 25% tariff on imported parts that took effect May 3.
Seth Clevenger and Mike Senatore dive into the Transport Topics Top 100 list of the largest logistics companies. They address trade challenges, mergers, sector trends and more. Tune in above or by going to .
Toyota has maintained that it will stay the course when it comes to its operations in the U.S. The impact of tariffs has seen Nissan Motor Co. halt U.S. orders for SUVs built in Mexico, while Honda Motor Co. is shifting production of the hybrid version of its Civic from Japan to the US. Mazda Motor Corp. will stop exporting one model type to Canada that’s made in the U.S. as a temporary countermeasure.
The U.S. is the largest market for five of Japan’s biggest carmakers. It accounted for around 23% of Toyota’s global sales last year, 28% of Nissan’s and 71% of Subaru’s, according to Bloomberg Intelligence. Of the roughly 5.9 million vehicles that Japan’s manufacturers sold in the U.S. last year, roughly half were imported.
Major Japanese carmakers, including Toyota, saw a surge in U.S. sales in March as customers rushed to lock in purchases before the tariffs kicked in and potentially add thousands of dollars to car prices.
“It’s unlikely we’ll make a big pivot since we’re still waiting to see the results of ongoing trade negotiations,” said Chief Financial Officer Yoichi Miyazaki. In the short term, Toyota isn’t going to raise prices because tariffs were implemented, he said.
Despite the uncertainty hanging over the sector, Toyota predicted global consolidated sales to increase to 11.2 million units this fiscal year, from 11 million a year earlier. The carmaker said electrified vehicles, including gas-electric hybrids and battery-electric vehicles, accounted for 46% of sales last year.
Want more news? Listen to today's daily briefing above or go here for more info
Still, Sato walked back a pledge he made shortly after becoming CEO in 2023 that Toyota would sell 1.5 million battery EVs by 2026. That goal will be revised based on changes in demand, he said May 8, while reiterating the importance of offering hybrid models to appeal to a broad range of customers.
In addition to the fallout of U.S. tariffs, Toyota investors are assessing the impact of Chairman Akio Toyoda’s attempted buyout of loom and car-parts business Toyota Industries Corp. His proposal values the company at 6 trillion yen.
When asked about the potential deal, Sato declined to share any details about plans for further integration within the Toyota group, though he reiterated the importance of Toyota Industries as a materials business to the carmaker and the broader business.
