Toyota Motor Corp has reported a sharp 43% drop in quarterly profit, underscoring mounting pressure on the world’s largest carmaker as rising costs, currency volatility and trade tariffs weigh heavily on earnings. The results were released alongside the announcement of a leadership transition at the top of the Japanese automotive giant.
For the latest quarter, Toyota said operating profit fell significantly year-on-year, driven largely by higher raw material prices, logistics costs and the impact of tariffs in key overseas markets. The company also pointed to continued investment spending on electrification, hybrid technology and next-generation mobility solutions as a drag on short-term profitability.
The earnings decline comes as Toyota confirmed that its long-serving chief financial officer will take over as chief executive officer, marking a strategic shift toward tighter cost control and financial discipline at a time of global uncertainty for the auto industry. The outgoing CEO will remain involved in an advisory capacity to support continuity.
Toyota said demand remains resilient in several core markets, particularly for hybrid vehicles, but warned that pricing pressures and geopolitical trade risks are likely to persist through the remainder of the financial year. The company also noted that profits across several Toyota Group companies were uneven, reflecting differing exposure to tariffs, supply chain disruptions and regional demand trends.
Despite the weaker quarter, Toyota maintained its full-year outlook, citing strong balance sheet fundamentals and confidence in its long-term strategy. Management emphasised that investments in electrification, software-defined vehicles and manufacturing efficiency remain critical to sustaining competitiveness as global rivals ramp up spending on electric and autonomous technologies.
Investors, however, are expected to closely scrutinise the new CEO’s ability to stabilise margins while navigating a more fragmented global trade environment and accelerating technological transition.
Toyota raises profit, sales forecasts despite US tariff impact
