Japanese auto giant Toyota Motor Corp said on Friday it had raised its profit and sales forecasts for the current fiscal year, citing cost reductions and stronger marketing efforts that helped cushion the impact of higher US tariffs on vehicle exports.
The world’s largest automaker said the improved outlook came despite “the negative impact of US tariffs that newly arose this fiscal year,” which had pushed up expenses and weighed on profitability, particularly in the second half of the year.
“Despite the negative impact of US tariffs that newly arose this fiscal year, we have reduced the extent of the profit decline by implementing cost reductions and marketing efforts,” Toyota said in a statement.
For the year ending March 2026, Toyota now expects net profit of 3.57 trillion yen (US$22.8 billion), up from its previous forecast of 2.93 trillion yen. Operating profit is projected to reach 3.8 trillion yen, compared with an earlier estimate of 3.4 trillion yen.
The automaker also lifted its sales outlook, forecasting revenue of 50 trillion yen, up from a previous projection of 49 trillion yen, reflecting resilient global demand and steady performance in key markets.
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However, Toyota said profitability weakened in the September–December quarter, with both net and operating profit falling despite higher sales. The decline was largely attributed to increased costs stemming from the tariff impact, as well as higher logistics and material expenses.
The United States introduced a 25 percent tariff on Japanese auto exports between April and mid-September, before implementing a reduced cap of 15 percent. Toyota said the tariffs increased production and export costs, squeezing margins even as demand remained firm.
Despite the trade headwinds, Toyota reported solid performance in the US market, where sales climbed eight percent during the period. Analysts said the growth reflected the company’s strong brand positioning, broad product lineup and continued consumer demand for hybrid vehicles.
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Toyota announced last month that its global vehicle sales hit a record high in 2025, helping it retain its title as the world’s top-selling automaker for a sixth consecutive year. The strong performance allowed Toyota to widen its sales gap with German rival Volkswagen, which has struggled with slower demand in Europe and intensifying competition in electric vehicles.
The overall sales increase came despite flat performance in China, a crucial market where Toyota faces mounting pressure from domestic automakers. Chinese brands, led by electric vehicle champion BYD, have rapidly gained market share, driven by competitive pricing, advanced technology and strong government support.
Toyota has been expanding its electric and hybrid offerings in China, but analysts say foreign automakers continue to face challenges competing against well-established local players in the world’s largest auto market.
Globally, Toyota has focused on a multi-pathway strategy, investing in hybrids, plug-in hybrids, battery electric vehicles and hydrogen technologies, rather than betting exclusively on full electrification. The company argues that the approach allows it to adapt to varying market conditions, infrastructure readiness and consumer preferences across regions.
The forecast upgrade comes amid broader uncertainty in the global auto industry, as manufacturers grapple with trade tensions, supply chain disruptions and shifting regulatory environments. US tariff policies, in particular, have prompted automakers to reassess production locations, pricing strategies and investment plans.
Toyota said it would continue to monitor trade developments closely while maintaining efforts to control costs and strengthen competitiveness. The company added that it remains committed to long-term investments in innovation, sustainability and supply chain resilience.
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Shares in Toyota were little changed in early Tokyo trading following the announcement, as investors weighed the improved outlook against ongoing risks from trade policy uncertainty and competitive pressures in key markets.
