Volkswacht Bodensee - Toyota sees profit drop as US tariffs, Mideast bite

The world's largest automaker by vehicle sales made the announcement as it revealed net profit fell 19.2 percent to 3.8 trillion yen ($25 billion) in the 2025-26 fiscal year.

Revenues last fiscal year rose 5.5 percent to 50.7 trillion yen, and for the current period it projected them to hit 51.0 trillion yen.

"Despite the impact of US tariffs... we secured profits consistent with our guidance due to increased vehicle sales volumes and the effects of price revisions underpinned by strong product competitiveness, as well as steadily accumulated improvement efforts such as expanded value chain revenues," Toyota said.

Japan agreed to invest $550 billion in the United States by 2029 in return for lowering threatened tariffs of 25 percent to 15 percent.

The promises remain valid even after the US Supreme Court struck down US President Donald Trump's global tariffs in February and he imposed a new blanket 10 percent duty.

The levies remain painful for firms like Toyota, even though it and other Japanese automakers have substantial manufacturing capacities in the United States.

In North America Toyota posted an operating loss last year, Friday's results showed.

"As CFO, I take very seriously the fact that this fiscal year will mark a third consecutive year of flat earnings outlook," chief executive Yoichi Miyazaki said.

"The main reasons for this are the slow pace of efforts to reshape our business structure from a medium- to long-term perspective, as well as to sow the seeds for future growth," he said.

"We have offset soaring material costs and comprehensive investments for future growth through efforts such as cost-reduction in depreciation, enhanced profitability across the value chain, and improvements in the model and volume mix," Miyazaki said.

"On the other hand, we have not yet been able to fully counteract the impact of major shifts in the business environment, such as US tariffs and developments in the Middle East."

Toyota said the Middle East impact for the current year will amount to 670 billion yen.

U.Maertens--VB