Toyota profit forecast improves despite US tariff pressure, as cost cuts and strong global sales lift earnings expectations

Toyota Motor Corporation has raised its profit and sales forecasts for the current financial year, despite facing fresh cost pressures from United States tariffs on Japanese auto exports.

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The Japanese carmaker said on Friday that it had mitigated the negative effects of the tariffs through aggressive cost reductions and targeted marketing initiatives.

For the financial year ending March 2026, Toyota now expects net profit to reach 3.57 trillion yen, up from its earlier projection of 2.93 trillion yen. Operating profit is forecast to rise to 3.8 trillion yen, compared with a previous estimate of 3.4 trillion yen.

Sales revenue is projected to hit 50 trillion yen, up from an earlier forecast of 49 trillion yen.

In a statement, the company said that although the US tariffs had a negative impact during the fiscal year, decisive internal measures had helped curb the extent of the profit decline.

However, Toyota said profit performance weakened during the September to December quarter, with both net and operating income falling despite higher sales, largely due to tariff-related costs that increased overall expenses.

The revised outlook follows Toyota’s announcement last month that global vehicle sales reached a new record in 2025, enabling the company to retain its position as the world’s largest automaker and widen the gap with German rival Volkswagen.

The strong performance came despite flat sales in China, a key market where competition has intensified from domestic manufacturers, including electric vehicle leader BYD.

In the United States, Toyota recorded an eight per cent increase in sales despite a 25 per cent tariff on Japanese auto imports imposed by Washington between April and mid-September, before the rate was capped at 15 per cent.

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The company said its latest forecast reflects cautious optimism amid ongoing trade uncertainty, underscoring its resilience in a volatile global market.