TOKYO: Toyota Motor expects profit to decline by a fifth in the current financial year, it said on Thursday (May 8), as weakness in the U.S. dollar and the impact of President Donald Trump's tariffs weigh on the world's largest automaker.

AI Brief
  • Toyota expects a profit drop to 3.8 trillion yen by March 2026, down from 4.8 trillion yen last year.
  • Tariffs and currency shifts are hurting profits-tariffs may cost 180B, while currency effects could cost 745B.
  • CEO Koji Sato says Toyota will maintain domestic production and protect the supply chain to support Japans exports.

In the latest example of how global trade disruption is hitting bottom lines, the world's top-selling car manufacturer said it expected operating income to total 3.8 trillion yen ($26 billion) in the year to March 2026, versus 4.8 trillion yen in the year that just ended.

Toyota's results also show how the tariffs have the potential to hit companies on a number of fronts simultaneously. While the automaker estimated the levies directly costing it at 180 billion in April and May, it said currency movement would be the biggest single impact on its full-year forecast, at 745 billion yen.

Uncertainty around Trump's tariffs and their implication for global trade have weighed on the dollar. For Toyota, a weaker dollar means less profit when U.S. earnings are brought home.

However, Chief Executive Koji Sato told reporters that his company will work to maintain domestic production and protect the supply chain, as the auto manufacturer giant holds an important role in raking in foreign currency through exports to Japan.