Toyota Motor Corporation has predicted a 21% decrease in profit for the current financial year, citing challenging external factors including U.S. tariffs and a strengthening Japanese yen. The projection, announced on Thursday, marks a significant decline even as global demand for Toyota’s hybrid vehicles remains robust.
The world’s largest automaker by volume has been facing increased headwinds from trade tensions, particularly the tariffs imposed under policies initiated during former U.S. President Donald Trump’s administration. These trade measures have led to higher operational costs and disrupted global supply chains, which continue to affect multinational manufacturers like Toyota.
In addition to the trade-related pressures, a stronger yen is further squeezing Toyota’s overseas earnings. As the yen appreciates, the value of revenues earned in foreign currencies diminishes when converted back to Japan’s currency, impacting the company’s bottom line.
Despite these challenges, Toyota’s hybrid line-up, which includes popular models like the Prius and hybrid versions of the RAV4 and Corolla, continues to see strong consumer demand. The company has positioned itself as a leader in fuel-efficient and lower-emission vehicles, a segment seeing rising interest amid global environmental concerns and stricter emission regulations.
While Toyota did not specify revised figures for its annual net profit, the anticipated 21% decline signals a significant adjustment from previous earnings performance. The company emphasized that it remains committed to long-term investment in electric vehicle technologies and efforts to streamline production in the face of a volatile global economic outlook.
Industry analysts suggest Toyota’s cautionary forecast reflects broader uncertainties affecting automotive manufacturers worldwide, including inflationary pressures, shifting trade dynamics, and rising material costs.
Toyota is expected to provide more details on its earnings forecast and strategic plans in its upcoming financial disclosures.
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