Toyota forecasts 34.9 % drop in annual net profit

While annual sales are projected to expand 1.0 % to a record 48.5 trillion yen, up for five consecutive years thanks to solid demand for hybrid vehicles, operating profit is forecast to slump 20.8 % to 3.8 trillion yen.

Trump's tariffs are estimated to reduce Toyota's operating profit by 180 billion yen, on top of the negative impact of rising material costs, estimated at 350 billion yen.

The full-year projections only reflect the estimated impact of the US tariffs for April and May.

Toyota President Koji Sato indicated at a press conference on the day that the automaker will consider expanding production in the United States in light of the tariffs. "We will seriously consider local production in the medium to long term," he said.

Still, Sato emphasised that the company will "unwaveringly" maintain its domestic vehicle output capacity of 3 million units per year.

For fiscal 2025, Toyota set its assumed exchange rates at 145 yen per dollar and 160 yen per euro, against 153 yen per dollar and 164 yen per euro for the previous year.

Its annual global vehicle sales, including those at subsidiaries Daihatsu Motor Co. and Hino Motors Ltd., are estimated to grow 1.7 % to 11.2 million units.

Meanwhile, Sato suggested that the company will revise down its plan to sell 1.5 million electric vehicles globally in 2026, saying, "We are beginning to see the reality of the pace of actual demand in each region."

For fiscal 2024, which ended in March, Toyota said its sales rose 6.5 % to a record 48,036.7 billion yen, the fourth consecutive year of growth. However, its operating profit fell 10.4 % to 4,795.5 billion yen, and its net profit slid 3.6 % to 4,765 billion yen, both down for the first time in two years.

The profit declines reflected rising personnel costs and expenses related to a testing scandal at Hino Motors.

[Copyright The Jiji Press, Ltd.]

Photo by Reuters