Japanese automaker Toyota Motor Corp has cut its operating profit forecast for the financial year ending March 2026 by 16%, following expectations of a large loss due to US import tariffs, rising raw material costs and a strengthening yen.
The world's largest automaker expects a loss of up to 1.4 trillion yen for the full year due to US tariffs, which is a sharp increase from the previous estimate of 180 billion yen for April and May alone.
Toyota's Chief Financial Officer Takanori Azuma said global market uncertainty makes it difficult for the company to make long-term forecasts, but production for the US market will continue.
Toyota is now targeting operating profit of 3.2 trillion yen, down from an original forecast of 3.8 trillion yen, despite recording a first-quarter performance that exceeded analysts' expectations.
However, Toyota's North American business posted an operating loss of 63.6 billion yen, compared with a profit of 100.7 billion yen a year earlier, driven by the direct impact of tariffs worth 450 billion yen.
Although there is a bilateral agreement between Tokyo and Washington to lower import tariffs from 27.5% to 15%, the implementation period has not yet been set.
Toyota shares fell 1.6% following the financial results announcement.
